When Sallie Krawcheck got divorced in her 20s, it felt like she didn't have anyone to help her navigate the separation — much less her own finances.
"It was the worst day of my life; I also sort of knew it was the best day of my life," Krawcheck, co-founder and CEO of investing platform Ellevest, tells CNBC Make It, expanding on a post she recently wrote for the company's blog.
At the time, Krawcheck says she was "pretty much on her own" to learn how to manage her money as a newly single woman. Her divorce attorney didn't have financial expertise to help her, but the financial advisors she talked to didn't have the divorce expertise she needed.
Though it happened several decades ago, some of the challenges she faced going through her divorce as a woman continue to exist today.
"The [financial] industry remains overwhelmingly male, and it's an older industry so financial advisors tend to be in their 50s and 60s," she says. "All of a sudden, you're talking to someone who is like your dad, who hasn't had anywhere near the set of shared experiences, or comes from the same place, and so that's very intimidating."
You may not be able to prepare as much as you'd like for a divorce. Krawcheck was "completely blindsided" when she discovered her then-husband's affair which preluded their separation.
But regardless, it's a good idea to know how to best protect yourself and your assets in the event your marriage comes to an end. Here are three mistakes Krawcheck recommends avoiding if you could be facing a divorce in the future.
1. Not negotiating hard enough
In a perfect world, you and your spouse have a prenuptial agreement that outlines which assets each party gets to keep and allows you to skip a lot of the negotiation that comes with a divorce.
But given only 1 in 5 married couples in the U.S. have a prenup, according to a 2023 Harris Poll survey conducted with Axios, it's more likely you'll be figuring out an agreement with your divorce lawyers and, potentially, a judge.
Krawcheck warns against making the mistake of not negotiating hard enough.
For women in particular, social stigmas may paint those who forcefully negotiate as mean, aggressive or unlikeable, Krawcheck says. She argues that this often leads women to undervalue themselves in divorce proceedings.
"Look at a woman who's advocating for herself, and all of the internalized messages of a patriarchal society come through," Krawcheck says. "She doesn't want to be too aggressive and she doesn't want to make them angry."
"Women who want money are portrayed in the media as being unattractive and shrewish," she adds.
To combat this, Krawcheck recommends imagining someone you love — your best friend, for instance — is the one going through the divorce and you're advocating on their behalf. You wouldn't want that person to be taken advantage of or have their livelihood jeopardized, so you might feel more empowered to speak up and fight for their needs and desires.
"Women are fantastic at negotiating for others," Krawcheck says. "Look at a woman advocating for her best friend. It is a sight to behold."
2. Not having all the information
"The other mistake is…getting to the [negotiating] table and not recognizing where all the money is," Krawcheck says.
She highlights the fact that over 70% of women encounter negative financial surprises when they get divorced or their spouse dies, according to a 2019 UBS study. And it's not just about assets like the house you bought together or an investment account you or your spouse has.
"You need to think about how your household income is going to change after a divorce, any tax implications for assets you receive in a settlement, where you're going to live, how your costs are going to change and more," Krawcheck says.
Think about these things — and ideally, work with a professional to understand all your options — before you start negotiating. Otherwise, you may arrive at separation proceedings unaware that there are assets you're entitled to or assets of your own that your soon-to-be ex is eyeing.
3. Putting off financial planning
At any stage in your marriage, it's smart to take steps to ensure your own long-term financial wellbeing. That means being involved in the joint money decisions and management. Krawcheck says she made the mistake of letting her first husband handle those things on his own.
"Money is money, but money in a relationship is power," she says. Not only because working together to make financial decisions can make your relationship stronger, but also because of the fact that financial abuse is almost ubiquitous with domestic abuse.
Outside of your finances as a couple, Krawcheck recommends keeping an individual emergency fund just in case of a divorce, or even the sudden death of a spouse. No one wants to think about the tragic ways a marriage can end, but the fact is if you get married, there is a chance you will get divorced. And if you're a woman who marries a man, it's statistically likely you will out-live him.
"Should women have an emergency fund — secret or not? Absolutely," Krawcheck says. "Should women be investing their own money and making sure they're funding their own retirement account? Absolutely."
It's up to you whether you discuss these accounts with your spouse, but "I do think there's a warning bell that should go off if you do believe you have to do this stuff secretly," she adds.
If your marriage is ending and you're beginning your next chapter, it's important to protect your financial wellbeing and address any of the major changes to your overall picture.
Depending on your situation, you may need to look at and adjust your insurance policies by removing your spouse or obtaining your own coverage. Keep an eye on your credit for any impact from closed joint accounts. If you had to drain an emergency fund or were relying on shared savings, start building that up again.
There's a lot to cover, but working with a team of professionals can help ensure you're addressing each item. Krawcheck's Ellevest recently released a divorce financial planning package designed to connect women with a team of certified financial planners and certified divorce financial analysts along with virtual resources to help them get through.
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