A Hopeful Future After Divorce
A Hopeful Future After Divorce

A Hopeful Future After Divorce

 

By:

Nancy T. Bell
Nancy T. Bell
CFP®, CDFA™

Wealth Advisor
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A Hopeful Future After Divorce

4 steps towards seizing financial control.

As an unknown future looms, it’s easy to feel out of control. To lose sleep. To be hounded by the “what-ifs.” No transition creates more of a freefall than divorce. You’re in a state of fight or flight most of the time. Women (especially) face enormous challenges. In addition to navigating children through the transition—ensuring they are emotionally cared for—most women also face economic survival:

  • How will I manage the monthly expenses?
  • Will I have to sell the home?
  • Will I have to go back to work?
  • How do I invest my money (something I’ve never done) to secure my future?

When I went through divorce, questions like these beleaguered me. As a financial planner at the Trust Company, I have come alongside many women as they’ve treaded the murky waters of divorce. They can feel like they’re drowning. As women, we worry we won’t be able to take care of ourselves and our families on our own, even though we’ve repeatedly demonstrated otherwise. My advice for women in this transition is simple, but not easy: face reality, create a plan to move forward, and surround yourself with a support system.

Face Reality

Most women know they’ll need to make some type of lifestyle change. What they don’t realize is just how big that change will need to be. In America, our perception is tinted rosy-colored by Hollywood. We like to believe that the husband will provide ample child/spousal support for the wife to carry on as she always has. But when the numbers are laid on the table, as required by law, and both parties swear to their accuracy, it often becomes clear that a wife will need to carry some of the family’s financial burden. In many cases, it’s unfair (and impossible) to expect the ex-husband to support two households with multiple children. As they say, the numbers don’t lie. You may ask for it, but if he doesn’t have it, you won’t get it.

One client I worked with years ago was accustomed to spending $30k a month, living in multi-million dollar homes, driving luxury cars, and traveling to exotic places. When she got divorced, she assumed she would maintain the lifestyle. But the reality was they had no assets. This is an extreme example, but reality is relative to each situation and the accustomed lifestyle. Hardship is hardship.

Unless there is an enormous disparity in income (in which your husband makes millions a year, and you have never worked), you will undoubtedly have to work. For women who haven’t worked in years, this can be terrifying. In fact, some women will remain in a compromised situation until it is unbearable—for instance, when a husband is obviously cheating—because they don’t think they are equipped to take care of themselves. In reality, they are more than capable. They just need to believe it.

Fear can be a powerful motivator or inhibitor. Fear of giving up a spending lifestyle is compounded by the fear of giving up a set of values. A stay-at-home mom, for instance, often has difficulty reconciling what her current situation demands with her values of working inside the home.

I counseled one woman in her mid-forties, who knew she needed to get a job. The thought was distressing. She and her husband had decided she would stay home with the children, resulting in her being out of the work force for a while. But with her skill set and education she had no problem going back to work. The first step feels shaky, but each consecutive step towards financial self-sufficiency leads women to a place of stability. They are in control, rather than being controlled by circumstances.

Know Your Support System

In the midst of the uncertainty and turmoil that comes with divorce, women need someone to talk to. But don’t confuse your confidants. When women get divorced they often mistake their attorney as their financial advisor, their mental health professional, as well as their legal advisor. Unwittingly, they treat their lawyer as the expert who will take care of all of those matters. No doubt, there are some attorneys who want people to feel that way—they like that dependency, because it racks up a nice fee. But the best attorneys are those who refer you to other professionals with the necessary expertise within their network.

To find the right support, I recommend women assemble a group of people they trust, beyond girlfriends and an attorney. Let your attorney stick to settlements and alimony; a mental health professional will help keep you on course and help you through the panic and the emotions you may be feeling. Likewise, a financial planner will offer you the financial counseling and ongoing education you need.

Plan Your Financial Future

Starting the process of financial planning can be an intimidating step, but the right planner will ease you through the process. You need a financial planner who empathizes—but can help you plan for many of the what-ifs without losing sight of the here-and-now. The best planner will help you bring together numbers, scenarios, and tangibles so you can take steps toward being in control of your finances.

When I’m getting to know a new client, I ask, “What do you want this money to do for you? What kind of life is this supposed to create for you? How do you envision your future?” On the flip side, the advisor should be ready to answer a client’s myriad questions, “How much do I have to save? How do I save that amount? Should I put the money in a bank account, a mutual fund, stocks, or some combination thereof?”

After a comprehensive assessment of my client’s financial goals, my first word of advice is this: Start finding more ways to save. Participate in your employer 401K plan. Even it’s not a matching plan, it’s always worth it to put money away pretax. I don’t care if it’s $1 or $50; it’s the least painful way to start building up a nest egg.

Next, I suggest my clients work on their bank account, to make room in their budget to put away $25 of every paycheck. While this might not build up tremendous resources, contributing even small amounts creates a sense of control.

It’s incumbent on women to know as much as possible about their finances; that knowledge is critical to their success. I always tell my lady clients, “It’s your money. Don’t just hope it is all taken care of. Be proactive about interacting with your financial planner on a regular basis. This is at the core of being and feeling in control of your future.”

Give Yourself Time

Even when the numbers start to come together, finding peace post-divorce can be a gradual process. In my case, I started my way forward when I confronted my worst-case scenarios. “What if I don’t have enough money to retire? What if this bad economy causes me to lose my job?” At that point, at 3 am with a knot in my stomach, I would take a breath and remind myself it has nothing to do with now, nothing to do with tomorrow. I can’t worry about what I can’t control.

As I began to manage my finances entirely on my own, consider how to approach the next stage of my career, and create a plan, I gained a sense of control. The panicked thoughts eventually subsided. I gained the ability to talk myself off of a ledge. I would wake up in the morning and see that I was, in fact, handling it. I’d always been handling it. And I began to realize not only was I handling it, I was exceeding my expectations of creating a great life.

As a financial advisor, it is especially gratifying to play a role in helping other women take control, as well. The financial planning process is so much more than crunching numbers. You’re creating a mindset. You’re demonstrating that you do have control over your finances—and, as importantly, the quality of your life that lies ahead.

Tags:  Divorce, Economic Survival, Financial Decisions, Financial Planning, Financial Security, Life Transition, Single Women, Widow, Women, Women and Finances, Women and Investing

Note:  The content of this article is for guidance and information purposes only and is not intended to be construed as advice. Information provided is not intended to provide investment, tax, or legal advice.