The Fragile Finances of the Expat Trailing Spouse. Defining Moves, The Art of Successful RelocationUpdate: After considerable lobbying from consumer groups, the US Bureau of Consumer Financial Protection has amended the rule requiring evidence of independent income when applying for consumer credit, replacing it with a declaration of household income. This is excellent news for accompanying partners in the United States who had been denied access to credit and left unable to build an independent financial identity, in a country where a credit card or credit history is required for everything from hiring a car to setting up a cell phone contract. Sanity is restored…

I came to a horrible realization the other day that I was beholden to my husband. It sounds incredibly old-fashioned; even using the word ‘partner’ in that sentence would be wrong, because it implies an equality that I had let slip away.

The dictionary describes the term beholden as owing something to somebody because of something that they have done for you’, so if you view being shuffled from pillar to international post as a favour, the word pretty much covers it. I realized that although I live in California, where community property and a 50/50 division applies, I did not have the independent means to pay for legal advice. And when he leaves all his dirty breakfast dishes on the counter above the dishwasher for the 5 millionth time, there is a big emotional difference between don’t want to divorce my Other Half, and CAN’T…

As with the vast majority of dual career couples, when I agreed to the OH’s first relocation, I was aware that from now on my own career would take a back seat. Global mobility research discusses the change (usually reduction) in income when a couple relocate, but discussion centres around household income, rather than individual earning power.

Which is exactly what I have lost. I have never worked in professions known for lavish salaries (nursing or teaching, anyone??), but I was able to earn significant personal income with opportunities for promotion. Now, however, my sole income in drawn from the ‘household’, and as such, is vulnerable. And I’m not alone.

It’s not just those of us who relocate that are in this position. It’s anyone who has chosen to reduce or give up work to manage family commitments, whether you are in constant global motion, or have never set foot outside your home town. If you have no independent source of income, whoever earns the salary holds the keys to your supposed household income.  And while you are legally entitled to a portion of those, it requires court approval to gain access to them, whatever the circumstances. Which also requires legal counsel, who (funnily enough) will want to be paid.

Take credit cards. Over the last 20 years, we have become used to being approved for credit, regardless of our personal income; the household income has always been taken into account. Sure, the credit limit may be small, but it’s quickly increased once our payment history shows our ability to make payments and manage the account well. However change is afoot, certainly in the US, where credit card issuers are changing their rules, and making it far more difficult for the accompanying partner to gain credit (and a good credit history), unless they are employed outside of home.

Last year, the Fed ruled that credit card applications should ask about a consumer’s individual income or salary rather than his or her “household income”. This isn’t just for students under 21, but for everyone. That means that a stay-at-home parent is considered as unworthy of credit as an unemployed college kid–and seven out of eight stay-at-home parents are mothers. No one without a pay stub, no matter the value of her contribution to her household, can get a line of credit unless her spouse cosigns the account. (Anisha Sekar,  July 7, 2011)

Now, in light of the recent economic meltdown, placing more focus on individual income and ability to repay debts is no bad thing, but it does have ramifications for those of us who suddenly lose the ability to get even the most basic forms of credit like a cell phone contract or credit card. It also means that unless you are named on the account, you lose the ability to make financial decisions, access accounts and resolve disputes, which if, like mine, your partner spends a great deal of time out of the country and on air flights, can make financial management impossible.

The Other Half is also the primary name on the host country bank account, and I don’t have automatic access to his account. Typically, he goes ahead to take up his new post, while I remain behind with the children to finish up the school year and pack the house for the move. It works well for us, but does mean that he has sole responsibility for setting up basic financial services in the new location, so it is his name on the salary transfer and tax details, and therefore his name on the account, at least until we get around to updating it.

We choose to manage this by having me sign all the checks (if he signed one himself, it would probably be dismissed as a forgery), I have the ATM card and PIN number, and I’ve set up the internet banking with my passwords. And while this unusual state of affairs makes for amusing dinner party conversation, it gives me absolutely no legal right to the household funds in that account, nor access to them should he suddenly develop amnesia / get run down by a London bus / decide to trade me in for a younger, blonder model…

The mention of Tax ID and salary above should alert you to the fact that opening your own bank account is not necessarily as easy as it first appears. Requirements vary from country to country, but most require evidence of who you are, your legal right to be in the country, how you will pay tax on any interest, and how you intend to fund the account. So when you turn up with your passport and cash, you may be disappointed… However, it is something that is worth doing if you value your sanity, because things can and do go wrong, and I am willing to bet that it is you who will be left holding the can when it does. If the money is in your sole name, you have control over it; if it’s not, you don’t. Simple as that.

And finally, let me mention the dying thing. I have known a few situations where a spouse has died at a young age, and not once did I ever hear the words “well now, let’s get on and sort out the money”. What I saw were people who had their lives knocked out from under them, who were trying to cope with immense loss, overwhelming grief, and devastated children. Imagine how much worse it gets when you are overseas, your right to be in the country expired with the demise of your spouse, and all your assets (and therefore your ability to get home, to make funeral arrangements, to pay medical bills and to pay for normal household expenses) are now severely compromised. I have seen it happen, and it was horrific.

So, if you do nothing else today, do these things for me, wherever you are. Get started on your own personal credit history, even if you have to take out a secured credit card to do it. Promise to keep track of your credit score, every month. Get an independent bank account in your host country, and commit to funding it, every month. And finally, make a joint will, keep it simple and safe, and make sure it is legal in the country that you live in.

Oprah would be proud. I feel more secure already…

16 Responses to Women, Money and What ‘Dependent Partner’ really means. The Fragile Finances of the Expat Trailing Spouse.

  1. Nancy Yung-Hoi says:

    This is a great article, Rachel. Sooo realistically true but of course, we take these things for granted until disaster strikes… Thanks for this..

    • Rachel Yates says:

      What surprises me is that we are all articulate, intelligent people who just weren’t paying attention. I think of myself as an equal partner in my relationship, and my husband would say the same. And then you wake up one morning and realize that that equality goes no further than your front door, and is incredibly vulnerable. I didn’t ever make a conscious decision to become ‘dependent’ – I just didn’t have a plan B. And as you say Judy, creating one after 10 or 15 years (which go by in the blink of an eye) is a challenge.
      Thanks for posting it on the online coffee page, Louise – it will be a fascinating discussion!
      Here’s the Facebook Expat Online Coffee link here
      http://www.facebook.com/groups/expatonlinecoffee/

  2. Judy says:

    Spouses easily slide, unwittingly, into a pit of financial dependency without realizing it. Quenby Wilcox’s plight is a good example http://www.quotidiandissent.com/post/876761269/of-exes-and-expatriates

    Over a 15 year period my husband’s career soared while mine tanked. It was unnerving to realize when I started job hunting upon repatriation that whereas formerly I could command a salary almost equal to my husband, I could now earn about a quarter. I don’t regret my time out of the workforce but making myself financially dependent was never a conscious decision.

    As you say this can happen to any women who chooses to stay home with the children, but to do so in a foreign country, where laws may not support equal rights for women and where you lack a strong support system, is a huge risk that many women like me never anticipate.

  3. Louise says:

    Thanks for the wake up call! A really important article and one that I need to print off to remind me daily to get things sorted.

    You’ve made me realise that I have been living under the assumption that I am equal on all accounts but I think that may not be true – something to investigate. I’m going to post this on the coffee online facebook page – this is SO important for partners to consider.

  4. Very thought-provoking article! This has been the biggest challenge for me, having to justify supermarket shopping expenses or small gifts (I don’t mean to make it sound like my husband is stingy, but I had a much easier comeback when I was earning more than him). What makes it more galling is that I always used to earn much more than him – and probably still would, if my freelance work was more regular, without long gaps. I don’t regret the flexibility and the time I get to spend with my children (and I do enjoy living abroad), but it does make me feel vulnerable and somehow ‘lesser’. Plus I dread to think what is happening to my pension provision.

  5. Susan says:

    Great article, which I would love to share…

    I have one addition besides the fact that I fully support an independent bank account and (however possible) financial independence.

    In European countries, part of your salary is put into a pension fund throughout your whole work life (which has now increased to the age of 70 years in most countries). This has awful implications for stay-at-home moms, or even worse trailing spouse. You simply do not save up any pension funds to support you in the later stages of your life. While this might be okay for the ones that set up private pension funding (how to pay for them though???!), it is a fact that many women simply tend to forget about.

    Now, if your husband passes away before you, and there has been no proper will put in place, it might have serious implications on your monthly pension. You Do NOT want to live on the state pension alone.

    So, make sure to talk to your partner and a pension advisor…I know it’s easy to push away! We are all oh so ever young, right? ;)

    • Rachel Yates says:

      You make such a great point.. I’m not even sure I qualify for a state pension – and the very fact that I am ‘not sure’ makes me VERY uncomfortable!

  6. Alison says:

    What a great post! Thank you for this. I think it’s common for trailing spouses to think about the emotional ramifications of leaving their careers behind, but not many of us think of the legal ones, so this is an excellent wake up call. I think it’s also important for the earning partner to consider the precarious position of the trailing spouse as well. It’s easy to say “It’s our money, not just my money,” as my husband always says, but that’s not necessarily how it’s seen in the eyes of the law.

  7. Thought you might be interested in this article – while we’re all worrying about our lack of financial independence, it seems that others who could have it are living in willful ignorance of their family finances. I may not be making as much money as I used to but I certainly know how much we’ve got, where it is and how to access it:
    http://www.nytimes.com/2012/05/16/world/europe/16iht-letter16.html?pagewanted=2&_r=1&partner=rssnyt&emc=rss

  8. Anne Egros says:

    Great article and thanks for the wake-up call. I have been working as a local in Japan and the US and few countries in Europe for 20 years in big companies. I paid for local social taxes but I won’t be able to count the years I worked outside Europe for my pension which will be ridiculously low. My husband always had an expatriate status continuing to pay for his pension in France. If my husband die before I do, I will only get 50% of his pension which is unfair. Most young expatriates don’t pay attention to this problem

    • Rachel Yates says:

      Thanks for the comment Anne. I totally agree – the information available for expat financial management always seems to centre on the couple as a ‘unit’, which, considering current divorce rates, is both naive and short-sighted. I would love to see financial planning for the partner (or at least some acknowledgment of the issues to be considered) become a standard part of pre-assignment counseling.

  9. Situ says:

    this is so timely. I have just moved abroad and had to leave my (low paying but fulfilling job comparative to my husband’s) job in the US because of a wonderful work opportunity for him in our new country. This is the first time I’ve never not worked and I’m finding it tough to adjust to both the logistical financial aspects of being financially dependent as you have discussed above as well as exploring and coming to terms with my feelings on my new status of not being a career gal. I am glad that I found this blog and will be following it closely to hear others’ experiences.

    • Rachel Yates says:

      I’m really glad that you found us, and found us useful! Yes, we all go through the same feelings (and as about 86% of accompanying partners had professional careers before they started on the expat path, you are most definitely not alone!) and thankfully, there are plenty of people out there who will empathize. Let me know if there is anything particular that you want to see discussed, and we’ll do our best. As an aside, have you signed up for the Facebook group Expat Partner Online Coffee? You might find it helpful – it’s a dynamic, engaging and entertaining group that get together online once a month, and are always delighted to have new members!

  10. Ute (expatsincebirth) says:

    Thank you for this wake-up call. It’s so important for expat “spouses” or “other halfs” (personally I don’t like these definitions!!) to know about all this! I would like to share your article on my blog.

    • Rachel says:

      Of course! Let us know if any of your readers have any comments to share with us – it’s always great to hear other perspectives!

  11. [...] on May 4, 2013 • ( 0 ) I would like to share this interesting article called “Women, Money and What ‘Dependent Partner’ really means. The Fragile Finances of the Expa…” from Rachel [...]

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