BY Julia Anderson
Divorce is often a financial setback for a woman. Statistics prove it.
After a divorce, women have less household income. They must juggle a job and family responsibilities, if they have children under 18. Their pay for an equivalent amount of work may be lower. They may be qualified for lesser paying jobs. All these factors make it more difficult for women manage their finances, let alone save for the long-term, for retirement.
When I appeared recently with my friend, Juliet Laycoe, on her Facebook live program, we talked about how important getting a “good” divorce settlement is and how it sets up your financial future for years to come. Laycoe is a divorce attorney, book author (Divorce Wisdom) and social media host.
She asked me as a financial guru to discuss how best to manage the early stages of a divorce.
Bottom line: Divorce is hell: Your emotions swing from grief to anger. There’s stress and deep anxiety. The tendency is to want it over as quickly as possible. A good attorney will advise you to SLOW THINGS DOWN.
You may not be thinking straight under the stress of a divorce. It is best to take a deep breath, get outside counseling and look to the long-term.
My early in a divorce TIPS:
Reminder yourself that this divorce will have a big impact on your long-term financial future. Let your attorney advise you on a long-term strategy. If your spouse is initiating the divorce, you may have more leverage. Play it cool. Ask for half of any pension payout that eventually would come to your ex-husband. Ask for half of his 401(k). Don’t count on child support. Half of divorced women are not getting child support.
Look carefully ahead at your FUTURE household budget. What will your income be, once the divorce is final? Add up your household expenses. Then look at income. Can you cover your expenses? If not, what changes can you make? Start establishing your own credit with a credit card in your own name. Get your own checking account. Keep your job skills up to date, add new job skills.
Polish up your employment resume. You are going to have to work, manage kids, pay for groceries. Can you find a better paying, full-time job. A good resume is important. Network with your friends on how to write good one. Think of yourself as an independent contractor…. with employers. What do you bring to the job they want you to do?
Get counseling, not just financial counseling. A good counselor can bring clear thinking to your future, what you want and how to make it happen. In the beginning, I was going to pack a bag and just leave. My therapist helped me realize I was just running when I needed to stay put, take a deep breath, and negotiate from a position of strength, not injury. Staying put was a GREAT financial decision.
Make saving a part of your financial plan. If you get a lump sum settlement from your divorce put the money to work for the long-term in a self-directed IRA. Make sure you are taking advantage of your employer’s 401(k) tax-deferred savings plan with matching. Build an emergency fund, so you don’t have to turn to high-interest credit cards.
Keep the faith. It may feel like the deck of cards has been thrown in the air but not yet landed. They will. Over time your future will become more clear, new doors will open, your heart will heal or at least mend a bit. Don’t try to rush through this terrible time in your life just to get away from the bad feelings, the anxiety and anger. Let it spin out slowly.
Click here to a link to a Smart Money show with Juliet Laycoe as our guest.
I meet women all the time who face job and money transitions and who want to do them right. It’s about building confidence and taking charge of the future. This is your money. No one cares more than you do!
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