13 Ways To Financially Protect Stay-at-Home Moms

How to self-protect when you give up your income

I made a joint decision to stay home and raise my children. I walked away from my career, professional advancement, and income. This came with a substantial risk.

One I didn’t thoroughly consider.

I didn’t self-protect or adequately contemplate the dependency I was adopting or the independence I was sacrificing.

When you read this, you will have a hard time believing I am an otherwise smart, business-minded, self-sufficient woman. Worse, you may possibly think me the stupidest individual you’ve met.

But these things happened to me.

Because love, even a withering one makes you believe you can trust someone.

We make an earnest and idealistic vow when we are young. Unfortunately, some marriages do not withstand the test of time. No matter how much we want it, try, or resist it.

I married the love of my life, my college sweetheart, and my very best friend.

A great guy.

Sadly, it’s not uncommon to be financially damaged by your spouse.

The following is a checklist to minimize your vulnerability as a stay-at-home mother. We don’t get insurance because we want something to happen. We get it in case something happens.

Opting to be a stay-at-home mom should yield the same assurance.

Credit cards

You need to maintain several credit cards in your name only.

My husband canceled my primary card while our marriage was struggling. He should never have had the ability to do so, but they allowed him to close an account I opened in my twenties.

We no longer used credit cards; therefore, I didn’t discover this for some time.

He ruined our credit to make it appear as if we were broke.

The combination of a poor credit score, no income as a stay-at-home mother, and no long-term credit history meant I could obtain zero credit. I was left unable to meet emergency expenses, nor did I have funds to hire an attorney.

Credit report

Sign up for continual credit updates.

You can create an account on creditkarma.com and receive regular status reports on your score, debt, and suspicious activity.

When my marriage began to suffer, my husband asked for the bills. Prior to that, I maintained all finances for our home, business, and investment properties.

My husband’s strategy was to claim our money was gone. He said we lived beyond our means and I was a big spender. Not true, but he attempted to support his claims.

He took out several credit cards in my name.

Again, seems difficult but he simply replied to offers that had been mailed to me. He also forged a $50,000 student loan in my name.

A consistent credit update would have exposed this activity long before my score was lowered. It also would have revealed his financially abusive divorce strategy.

I now had an extremely low credit score, debt, and no income. No one would rent to me.

Bank Accounts

You should have both a joint and personal bank account.

The personal account will establish your credit and have cash reserves. The joint account will protect your marital cash.

I had a joint marital account and a joint business account.

My husband froze my debit card, withheld food money, and more.

The day I was bold enough to deduct money from our joint business account he closed it.

I now had low credit, debt, no income, and zero cash.

Copy all financial, legal, and insurance documents

Keep a separate copy of all financial, legal, and insurance documents.

I didn’t have access to them because my husband took them. This placed me at a disadvantage. I was able to request copies of some and unable to get others.

Bank records only go back seven years.

He had been hiding money since we first started having problems. I could no longer get these bank and investment account statements. He also had copies of our taxes. Documents that demonstrated he was distorting the business income.

It is hard to track activity if a spouse has had a long-term plan.

I have low credit, debt, no income, zero cash, and am financially in the dark

Protect your assets

Know whose names your assets are listed in.

Is your house in both names? Is your car in your name? Do you have other properties? Investment accounts?

You need any properties to be in both your names. You also need your car to be in your name.

This protects your assets.

However, there can be liabilities in joint ownership.

My husband made himself an employee and stopped paying several years of business taxes. This made it appear as if he made less. A lien was put against our house and I was attached to that liability.

However, he was made to pay the tax debt since he forged my name.

It was still better for me to be listed as a joint owner.

Pay yourself

Determine a mutually agreeable amount you will receive each month.

I wasn’t doing a favor.

I sacrificed my career path and goals for the benefit of our family.

In doing so, I became less marketable. I lost my independence. I became vulnerable to severe financial and emotional abuse.

One person decided he deserved it all.

Do not blindly sign documents

Do not sign anything without reading it in its entirety.

Back to the love and trust thing. Yes, we were having issues but he was still my husband. I didn’t have any reason to believe he was capable of what he ultimately did.

In the years I managed our finances I read everything.

After that, he put the papers in front of me and I signed them. As a woman, I am not alone.

My husband changed our life insurance. He had made himself both the owner and beneficiary of my policy. He distorted the business earnings on taxes in the years before he forged my name.

Create a Postnuptial Agreement

You should consult a family law attorney and create a postnuptial agreement.

If this conversation existed when I walked away from an income, I might have had an entirely different outcome.

It’s not unusual for a woman’s highest income-earning years to occur during the time she spends raising her children. Nor is it uncommon to re-enter the job market at a substantially reduced salary. Neither of these is easily recouped in a divorce.

A postnuptial agreement is a legally binding document.

It should be drawn up by a family law attorney, signed by both spouses, and notarized. It’s smart to consult both a financial expert and a divorce financial expert. It’s also a good idea to interview multiple family law attorneys to educate yourself.

This agreement should state you came to a mutual decision to stay home and raise your children. It can discuss potential compensation for years at home and how assets and liabilities will be divided in the event of divorce. It can include health insurance provisions and other concerns.

A postnuptial agreement shouldn’t be optional, it should be standard.

This is the closest you will get to divorce insurance.

Meet annually

Meet once a year to review all financial information.

My husband and I met every January to go discuss savings, retirement, goals, and other critical information.

When he took the bills over we no longer met.

One day he told me our savings were depleted.

I was furious but what could I do? He said he had spent it. He had begun acting uncharacteristically so I thought he was going through a mid-life crisis and had mismanaged our money. I should never have stopped looking at our financials.

Review your actual savings, retirement, and bank accounts for the year.

Don’t just discuss them, look at the actual figures. If you own a business go over those numbers. Make sure the deposits match the income. My husband told me our business was struggling, but it wasn’t.

Confirm your insurance policies are paid and the amounts you believe them to be. In preparation for divorce, it’s not uncommon for spouses to borrow against mortgages or insurance policies. This is a part of how they hide money.

Despite being the primary income earner, my husband canceled his life insurance after I told him I was unhappy. Unbelievably, he continued to pay a policy on me for years after that.

While I was desperately working to save my marriage, my children and I would have been homeless had something happened.

An annual fiscal check-up would have revealed some of these facts.

Do not relinquish control of the bills and finances

Choose to be the one who manages the money.

In the years I managed our money, I was less susceptible to financial abuse.

I was fully involved.

I knew what our home, office, and investment properties generated and the cost. I was responsible for mortgages, refinancing, insurance policies, car negotiations, repairs, and retirement accounts.

It would have been extremely difficult for my husband to hide money let alone subject my children and me to a five-year divorce.

Fiscal knowledge and involvement reinforce some independence.

Retirement

Establish an individual retirement account, a spousal IRA.

If you were working outside of the home you would have your own retirement account just as your spouse does. Often in addition to your joint investment and/or savings account.

Speak to a financial individual about the likelihood of establishing a spousal IRA.

Make supplemental income

Generate some form of part-time or supplemental income.

Thankfully, the digital world makes it somewhat feasible to keep one foot in the professional world. This allows skills to stay current and additional money to be saved.

Ironically, I went back to work part-time years before I left. We didn’t need the money. I wanted to work.

But part-time income does not equal full-time pay and stability.

It’s a slow build after many years at home.

I foolishly believed since I quit my job in my twenties to help build a business, I had additional security. You are equally as vulnerable to divorce if you have a business together.

Bills

Know what your bills are and where they are being sent/paid.

My husband secured a P.O. Box without my knowledge. This is done to open new accounts and hide money so your spouse is none the wiser.

He did most of his transactions online and created many email accounts.

However, a physical address is still required to open bank accounts, investment accounts, etc. Unbelievably, I did come across the P.O. Box key, I just didn’t understand what it meant. And he brushed it off as needing an additional business box.

Mine is a cautionary tale.

This is just a highlight, consider it CliffsNotes to the abuse I experienced throughout my divorce.

I was financially wiped out and continue to rebuild my credit and life.

No one, let alone one who promised to love you forever, should yield this type of powerful abuse in your life.

Twice we had made a joint decision for me to walk away from my income for the benefit of our family. He felt absolutely no sense of obligation to these joint commitments.

Instead, he said it was, “His money.”

He painted me as the lazy mom who didn’t carry her weight.

A far cry from the man who wanted me to stay home and raise our children.

If you’re still thinking this won’t happen to you, think again.

Think about your children. Because mine, unfortunately, experienced this with me. They suffered while one parent used money as a weapon.

We don’t get insurance because we want something to happen. We get it in case something happens. It’s responsible. It’s smart. It’s not based on emotion.

It’s based on self-protection.