It’s more essential than ever before that women have a firm grasp on their finances-whatever their marital and socioeconomic status. Between women’s emergence as a primary wage earner and new technology that can be used for criminal purposes, knowing your money inside and out-and how to protect yourself against potential pitfalls-is critical.

Your Money: An Overview

It goes without saying that all women-and their financial goals-are different, but there are a few common denominators. We all want to be financially secure, and we all want to create a good life for ourselves and our families. But what constitutes a good life varies somewhat. Cheryl Kuppler, Esq., owner of Kuppler & Associates, said she sees these differences every day. "I had one client whose income was in the hundreds of thousands of dollars. She was single, and her goal was to accumulate as much money as possible and retire at age 45. Other women want to work to make sure their children can attend the college of their choice to or make sure their retirement will be secure."

Other women want to start their own businesses, which provides flexibility and may lead to a substantial income, Kuppler said. "I help women set up and organize these businesses in a financially advantageous way. As their businesses grow and prosper, there are many financial and retirement vehicles available to shelter that income and avoid extra taxes."

If you’re young and single, it may be difficult to discipline yourself to save for the future-after all, you have your entire working life ahead of you. But Kuppler said that’s exactly what these women should be doing. "If you’re earning a good wage, make sure you max out the retirement options your employer has. Also, make sure you pay off all credit card balances by the 30 days allowed, and avoid carrying lots of credit card debt and only making minimum monthly payments. That can create a big financial hole that’s hard to dig out of. Be aware of your financial position, what you owe, and what you make. Do a periodic balance sheet of your financial health and be serious if you need to make changes."

For older, more established women, Kuppler advised reviewing all of the financial vehicles and retirement savings options available. "Don’t be scared to invest some of your hard-earned money in equities and take advantage of the rising stock market. Also, don’t be afraid if the market goes down-or doesn’t go up as much as you would hope. Invest for the long term and get good professional advice on what equities make sense for you. Be careful about hot stock tips. I do lots of tax returns where a hot stock tip resulted in a big investment loss."

She said as in other areas of their lives, women need to start thinking of themselves first when it comes to finances. "Women spend a lot of time worrying and taking care of everyone else in their family and sometimes forget to take care of themselves and their personal financial health. Women always put themselves last on the list, and that can be dangerous. Lots of women, through divorce or other reasons, are heads of households. By necessity, they need to be aware of budgeting, saving, and retirement planning."

Romance and Finance

Merging lives with your partner can be an exciting, emotional time, but family law attorney Susan Butler said a little practicality can go a long way in terms of financial health. "Women need to be fully aware of the financial condition of their fiancé before the marriage takes place. There needs to be an honest and open discussion by both people prior to combining their finances and creating a new financial entity. Nothing sets up a new marriage for failure like money trouble. "

Butler said every woman should maintain at least one general purpose credit card with a large limit in her name alone to preserve her viable credit status throughout the marriage. "Also, a woman should remember that any asset she owns in her own name prior to marriage will remain her separate property in the event of a divorce, provided she hasn’t gifted the asset to the marriage-for example, by placing the title into joint ownership."

As for the controversial prenuptial agreement, Butler said they aren’t necessary for most women. "However, they absolutely must be considered for all second and third marriages. These marriages likely involve more mature people who have separate families and who likely have accumulated wealth. A prenuptial agreement enables such individuals to make advance arrangements for segregating or sharing property, making testamentary plans for their separate families, and planning in the event the marriage ends in divorce. The process can be edifying for such a relationship because it requires detailed communication about finances before the wedding, which can result in a deepened sense of commitment without worry about making arrangements in the future," she said.

Where prenuptials can go wrong is when one party has ill intent, Butler said. "If one person uses a prenuptial as a means by which to gain financial leverage over his or her fiancé, or to preclude that person from obtaining rights to property otherwise available under Illinois law, then all the romance can be removed from the relationship. I’ve seen couples break up during the course of negotiating terms of a prenuptial agreement, and the cause uniformly has been that the party with financial superiority has attempted to make arrangements unfair to the less financially secure party. Prenuptial agreements shouldn’t be a means for a financially superior partner to take advantage of the another."

Once married, Butler said women should participate fully in financial decisions and recordkeeping. "It’s not unusual in my practice to work with women who confess to being totally in the dark concerning marital holdings, obligations, and tax considerations. It’s a big mistake for women to relinquish control of the finances; there needs to be mutually supportive work on marital money matters. A married woman should also be aware that any funds or property inherited or received as a gift during the course of her marriage will remain her separate, non-marital property so long as title is maintained in her sole name."

Cohabitation, as opposed to marriage, is becoming more mainstream, and Butler said this arrangement can have significant ramifications. "From a financial standpoint, living with a man outside marriage is probably the single biggest mistake a woman can make. Illinois doesn’t recognize common law marriage and doesn’t authorize claims for palimony. This means property rights and maintenance rules don’t apply to domestic partners whose relationships end."

In such a situation, Butler said a woman is entitled only to assets titled in her name or acquired by her. "If the man purchased the home solely in his name, the woman acquires no equity interest in the residence, despite the fact that she may have contributed to the mortgage payments each month. Any women living with a domestic partner should take care to purchase all real estate in a suitable form of joint ownership, incur debt jointly with her partner rather than individually, and make equitable arrangements for payment of living expenses and funding of retirement interests for both partners."

Protecting Yourself From Techno-Scams

Identity theft and related crimes are becoming more common, and crooks are becoming more creative. "Identity theft is one of the fastest growing white-collar crimes in the nation," said National City Private Client Group Senior Associate Jill Finnegan. "It occurs when someone uses your name, Social Security number, bank, and/or credit card accounts without your knowledge. Thieves use this information to commit fraud and other crimes."

Finnegan said there are many steps women can take to protect themselves from this nightmare, however. "Don’t carry your Social Security card in your purse; instead, keep it in a secured location. Carry only the personal identification, credit cards, and/or debit cards that are actually needed. At home, promptly remove mail from your mailbox, and only deposit mail in a secured post office collection box. Refrain from leaving mail unattended in your personal mailbox to be picked up by a postal worker. If you’re away from home for a period of time, have your mail held at the local post office so it doesn’t accumulate in your mailbox."

Paperwork can be a good source of material for crooks, so Finnegan said it’s smart to retain only necessary papers and information, keeping them in a secured location. "Tear or shred all papers and documents no longer needed. Secure all of your financial information, personal information, statements, and bills safely in your home-especially if you have roommates, if you employ outside work, or if you have maintenance and service repair conducted in your home. Also, pay attention to billing cycles for your bills, and contact creditors if a bill isn’t received. Place passwords on all of your accounts, and avoid using easily available information such as birthdays and phone numbers."

A lot of commerce takes place over the phone and Internet, and Finnegan said new rules apply to these technologies. "Only give out personal information when you’ve initiated contact or you’re positive to whom you’re talking on the other line. Confirm you’re dealing with a legitimate organization. Search the organization’s Web site to check for information that matches scam alerts. Use customer service phone numbers listed on your bill or statements when making inquiries and/or reports. Regularly update virus protection software on your computer, and don’t download files sent to you by someone you don’t know. Don’t store financial information on your laptop unless necessary, as laptops can be stolen easily. And, of course, only give out your Social Security number when absolutely necessary."

If the worst happens, and you suspect you’ve been a victim of identity theft, Finnegan said the first thing to do is close accounts and contact all creditors immediately by phone, asking to speak with a representative from the fraud/security department. "Follow up with financial institutions in writing by way of certified letter, and keep a copy of the letter and return receipt as proof of when the letter was mailed. Call one of the three major credit bureaus-Equifax, Experian, or Trans Union-and place a fraud alert on your Social Security number. Also, contact the Social Security Administration at (800) 772-1213 and then file a report with your local police department."

The road to recovery from identity theft is long, but Finnegan said it’s certainly possible. "The sooner you detect and report identity theft, the easier it is to resolve the problem. If you become a victim of identity theft, you should monitor your credit reports and financial records for several months after discovering the fraudulent activity. It’s also suggested you review your credit reports annually after an identity theft has occurred." TPW