For Mother's Day, Financial Knowledge

It's time to think about the financial issues that women face.
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As Mother's Day approaches, it's time to remember that women face special financial issues, even if they aren't mothers. Almost every woman has that small, secret fear of being a "bag lady" -- of winding up older, alone, and needy. It's not an irrational fear.

One you reach age 65, the chances are a woman will outlive a man by five years. Women simply live longer. According to 2004 U.S. Census Bureau figures, there were nearly 117.3 million adult females in the population of this country. Of those, more than 11.1 million were widows. By contrast, the adult male population totaled 110 million. Of those, only 2.6 million were widowers. (This last statistic comes from a book on financial planning; see below).

If there is a man in your life as you age, you're more likely to be the caregiver, using up both your energy and your financial resources. That's why I always use the Mother's Day holiday as a reminder to consider the purchase of long-term care insurance. It is the perfect gift for Mom (or for Dad on Father's Day). (See the columns on that subject at my Web site,

www.TerrySavage.com.)

Whether widowed or divorced or alone by choice, women need to confront the financial issues -- and the sooner the better. And if you are in the process of a divorce, or become a widow, there is help for you in two books that have stood the test of time and are now out in new editions.

The fourth edition of Alexandra Armstrong and Mary Donahue's wonderful book,

On Your Own: A Widow's Passage to Emotional and Financial Well Being

is now in bookstores. When I was asked to write a comment for the book jacket when it was first published several years ago, I said: "If someone you care about is widowed, don't send flowers -- send this book!" Those are exactly my sentiments today.

This book has been updated, and also it has aged well. The two authors weave tales of women in vastly different circumstances who find themselves widowed and facing a range of emotional and financial problems and decisions. This is not a "feel good" book -- although it certainly will make a widow feel better. It is packed with specific advice -- from dealing with shock to planning a funeral, from reorganizing your finances and making a budget to selecting new advisers or making a decision to sell the house and relocate.

Given the fact that nearly half the marriages in this country will end in divorce, here's another book that will be helpful, not only to women, but to the men who will also survive divorce better if it is handled in a reasonable way.

If more divorcing couples read

Divorce and Money

by Violet Woodhouse (Nolo Press), now in its seventh edition, divorce lawyers wouldn't be so rich. Certainly couples may need individual counsel to deal with differences over custody and parenting, or to understand state legal requirements. But since so much of the divorce litigation is directed at money, couples would have more assets left to split if they could agree on a structure in which to discuss these issues.

Divorce and Money

will take you by the hand and guide you to sensible solutions about how to divide debt, how to deal with assets such as the family home or the retirement plan, and how to lower the costs of the process. Woodhouse is a certified financial planner who understands the long-term financial impact of decisions made in divorce.

When divorce is complicated by debt problems, or abuse of credit, or sophisticated assets like options, Woodhouse has ideas for structuring settlements to be both fair and favorable -- and sensible. This is not to suggest you become your own lawyer. Only that the more you know, the less you'll fight, and the more money you'll save.

Acting knowledgably in times of stress, such as divorce or death, is critically important in defeating the worry about winding up alone, in poverty -- a "bag lady." Only by confronting money decisions and arming ourselves with knowledge can we women truly have financial security. And that's The Savage Truth.

Terry Savage is an expert on personal finance and also appears as a commentator on national television on issues related to investing and the financial markets. Savage's personal finance column in the Chicago Sun-Times is nationally syndicated, and she released her fourth book,

The Savage Number: How Much Money Do You Need?

in June 2005. Savage was the first woman trader on the Chicago Board Options Exchange and is a registered investment adviser for stocks and futures. A Phi Beta Kappa graduate of the University of Michigan, Savage currently serves as a director of the Chicago Mercantile Exchange Corp. She also has served on the boards of McDonald's and Pennzoil.

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