Salting away money varies according to taste

Women are pragmatic enough to save 'leaving money', although the approach varies across the generations, writes ALANNA GALLAGHER

DARLING, I love you . . . the little words that mean I will set up home with you, maybe even marry you but, although I take a vow to share all my worldly goods, I am going to salt away something every month, my “leaving money” or “escape fund” – cash that will help me make the great escape should I need to.

This is the belt and braces approach to domestic bliss. He loves me and, if he loves me not, I have a plan B.

It’s not a modern credo.

Historically, leaving money was something married mothers did. It was scrabbled together from the shopping and children’s allowance and its existence gave the generation of enforced stay-at-home mothers a sense of control over their lives – something many of them did not have while the pre-1973 marriage ban existed.

Thirty-five years on, with more than 850,000 women now in the workplace, is the concept still relevant?

One 33-year-old entrepreneur thinks so. She owns two houses and has enough liquid cash to get her through the next year without working. She is the daughter of divorced parents and it was their break-up that drove her need for complete financial independence.

Her mother saying “I have nowhere to go and no money to go anywhere” is one of her formidable childhood memories.

This entrepreneur is unusual for a 30-something, observes Christine Smart, chief executive of Donabate-based financial advice organisation Prosperity Planning.

Women’s attitude to money is driven by their age. Those who never had a lot have saved in the credit union where they could lever up to three times their savings. This preserved their financial independence.

“The well-heeled 40-something woman has been a very good saver,” she continues. These so-called wealthy wives or partners have been salting away the children’s allowance or shopping money for years.

“They’ve had access to money with very little discussion within the household about the subject – there being very little need, until now. This financial cushion is now being used to rescue their high-flying husbands and, in some cases, is key to their family’s survival.”

In contrast, Smart sees the 20- and 30-something professional as having supreme confidence in their earning ability but little savings behind them.

In a professional context, leaving money is also significant.

Sheila Fogarty is director at Yellowstone Communications Design. She is 50 and has been married eight years. The couple work together but do not have a joint personal account.

Most women in a working environment would have leaving money that could be used for seed capital for a venture or a golden parachute, she says. “In terms of being a director of an SME and working with my husband, I have set aside my SSIA with the intention of using it as seed capital should our working relationship break up.”

As an executive, you don’t have total control over what’s going on, Fogarty adds. “It’s about keeping something in reserve as financial independence.”

For the entrepreneur, it is just- in-case rather than leaving money. It’s called rainy day money because it gives you a feeling of security, she adds. “All women should have their own money and always have a bit stashed away – I bet the guys do.”

However, even if they do, it is worth noting that you can’t take it with you should your marriage end in divorce or separation.

“Whether it’s a husband or wife, you must, at the time of separation, disclose all your assets which renders any leaving money argument null and void,” cautions Muriel Walls, partner in McCann Fitzgerald Solicitors.