For many women, divorce kick-starts a crash course in money management

When Nancie McLeod got divorced 15 years ago, she found herself starting from scratch financially.

“I didn’t have any savings,” said the designer and realtor, now 65, based in Etobicoke, Ont. “I had to start over.”

Like many women of her generation, Ms. McLeod grew up in a household where money wasn’t discussed openly. That led to a lack of financial literacy, which continued into her marriage.

Ms. McLeod’s experience is not unique. For many women – especially those in heterosexual relationships where finances were traditionally handled by their husbands – the end of a marriage can lead to a crash course in personal finance.

Although Ms. McLeod saved during her marriage, much of her income went toward raising her family. After her divorce, she had to rebuild. With help in the form of a loan from her sister, she bought a home. Then she sought out a financial adviser and chatted with her friends in similar situations. It was then that she realized that she wasn’t alone in feeling financially behind after divorce.

“It was talking to other women that really opened my eyes to how little we knew,” she said. “Thank goodness I’m not the only one, but holy cow, our financial literacy is in dire need [of help].”

According to Zena Amundsen, a certified financial planner based in Regina, gendered divisions of labour in the home often result in men taking the lead on financial decisions. “Many women are focused on running the family and caregiving,” she said. “The lack of financial education isn’t about intelligence, it’s about exposure.”

A 2024 survey by Edward Jones found that only about a quarter of Canadian women said they learned money management in school, compared with 35 per cent of men.

That lack of exposure becomes painfully clear during divorces. One example is that many women are surprised to learn that they can no longer income-split with their spouse, a move that can significantly reduce taxes.

It’s common that women don’t have the knowledge they need to navigate financial challenges later in life, said Julie Petrera, a senior strategist at Edward Jones. “Up until that point, they might have had somebody else in their household that was helping them or managing that for them. They were never formally taught, and they were never informally taught or practised household financial management.”

For women going through divorce, experts recommend a few key steps.

First, assess your financial situation, Ms. Petrera said. Tally your assets, debts and sources of income. Next, adjust your financial goals to reflect your new life. A financial or retirement plan created during a marriage may no longer fit after a separation, especially with one fewer income.

Another common shock, according to Toronto-based divorce financial consultant Eva Sachs, is that many women haven’t established a credit score in their own name, so it’s important to open a bank and credit account in your name and update any authorizations on existing accounts.

Finally, it’s important to update all legal documents and authorizations, such as a will, power of attorney, and beneficiary designations, Ms. Petrera said.

Now Ms. McLeod is determined to help her children learn about saving. Her two sons, both in their mid-20s, have a standing deal with her: Whatever they contribute to their tax-free savings account each month, she’ll match it. It’s her way of helping them build financial security early – something she wishes she’d had herself.

“Women need to understand finances, and they need to understand that they may be on their own,” Ms. McLeod said. “I wish I knew more, but I’m still learning.”

It’s also a smart idea to work with a financial adviser for guidance during and after the process.

For Lori Germain, who lives in Toronto and separated from her husband in 2021, preparation made all the difference. During the divorce proceeding, she went through her “finances line by line with an adviser,” said Ms. Germain, 60. “Because of that process, I wasn’t hung out to dry as much as some people.”

“It certainly left me feeling fairly empowered, in a world where that doesn’t happen very often to women.”