4 Simple Steps for Women Going Through a Divorce
Divorce can leave you feeling tremendously vulnerable. You may fear you’ll lose everything – time with your kids, the lifestyle you’ve become accustomed to, and the close relationships with friends and family members. I want you to know that your divorce can be fair, equitable and supportive of your goals including maintaining your close relationships with your children and family members. In order to create this outcome, however, you need to know what questions to ask yourself and what questions you need to ask about your finances.
Five years ago, after many years of being married, I found myself facing divorce, and I was scared, sad and uncertain about what my future would bring. Every day, I questioned my decisions, I cried any time I was alone, and I was fearful of what was to come. After many months of repeating this pattern, I did something different. I faced the mirror, placed my hands on my cheeks, and said aloud, “Catherine, you will be okay!”
Crazy as this may sound, saying these powerful words in front of a mirror actually gave me a little more strength each day. Five years later, because of these four very simple, yet profound words, I am more than okay, my kids are doing well, and my life is pretty amazing. Saying those four simple words took me from feeling bad about myself and feeling powerless to taking action and feeling in control over my future. I was suddenly willing to seek the information, guidance and support I knew I needed. Unfortunately, I could not find the help or guidance I was seeking at that time, so I had to create my own path. This led me to create a service to help women take control over their futures – financially, emotionally and mentally – by giving women the tools, the information and the guidance so vital when going through a divorce.
If you are currently going through a divorce and you don’t like how the process is unfolding, or if you’ve recently made the decision to end a marriage, I invite you to give yourself a confidence booster. Look in the mirror and put your hands on your cheeks and say aloud, “I will be okay.” Next, use these four simple steps to gain clarity, gain confidence and get what you truly want during and after your divorce:
- Get it on Paper: Goals Move You Forward
Ask additional questions to map out your true goals. Maybe you wish to stay in the marital residence. If so, create a detailed budget and consider the pros and cons of keeping the marital property. The priority here is to be honest about what you want, write it down and then sit with someone you trust to develop a plan that makes these goals realistic and attainable. Without clear goals, you will be unable to make important decisions which will affect your emotional and financial future.
- Organize Important Documents to Support Your Goals
Now that you’ve established your goals, it’s time to gather important documents to support those goals. Let’s say you set a goal to stay in the marital residence. Do you know how much it costs to maintain that home? For instance, what are the monthly expenses, how much do you owe on the mortgage, how much are the property taxes, and what is the current market value of the home? If you can’t answer these questions, you’ll need to find the information so you can answer these questions. Now is the time to get organized so you can access these answers and make important financial decisions. As Certified Divorced Financial Analysts, we can help you set, organize and implement your goals at Divorce U Solutions. Money Managers can also be helpful with this important step. Whether you hire a professional, or you do this discovery work on your own, just make sure you have documents on hand for easy access and for reference.
- Consult a Professional Regarding Dividing Assets
Divorce is a rocky road with a lot of unknowns. Many questions loom about what’s yours, what’s mine and what must be divided equally between the two of us. Focus on the knowns. Many people do not understand the difference between marital and non-marital assets. For instance, did you know that if you inherited money during your marriage, but never comingled it with your spouse, the inheritance is considered non-marital and solely yours? Did you know that if your spouse has a pension in a company he/she has worked in for over 20 years and you’ve been married during the same 20 years, that pension is considered marital and a joint asset? It’s important to understand the laws regarding marital and non-marital assets, so be sure to consult with a professional before you sign any binding agreements.
- Determine What’s Fair Versus What’s Equitable
This is a topic often overlooked and frequently misunderstood. Let’s say you and your spouse own a house worth $200,000, qualified accounts worth $100,000 and cash totaling $100,000. Your assets may look simple to split; you keep the cash and your spouse keeps the qualified accounts and you both split the proceeds of the sale of the house. This seems absolutely fair, but is it equitable? Many of my clients retain my services while working with mediators and attorneys to ensure the asset split is not only fair, but also equitable. For instance, in the example above, did you consider the tax deferral growth you were losing by letting your spouse maintain ownership of qualified accounts? Did your spouse consider any costs involved if she/he needed access to money before retirement? A Certified Divorce Financial Analyst (CDFN) can show you the long term effects these decisions have on your financial future. Taking this time with a CDFN will prove a worthy investment in the end.
Whenever we experience a life transition, all we really want to know is that we will be okay. Going through a divorce is no exception. Divorce marks the formal ending of a marriage, but it can also mark the beginning of a positive, healthy and happy life.
From my own divorce experience, I noticed when I started taking simple steps, I instantly felt a bit more confident, more in control of my life and I started to see what was possible for me moving forward. It’s important to remember through this process that the act of divorce itself does not define who you are, but how you move through this process certainly determines your future – financially, mentally and emotionally. Understanding the formal process of divorce and making smart decisions throughout the divorce process has an enormous bearing on your finances and for your emotional well-being. When you take these four simple steps, #UwillbeOK!
Catherine Shanahan is a Certified Divorce Financial Analyst at My Divorce Solution who partners with Karen Chellew, LL. My Divorce Solution is committed to helping divorcing couples develop a transparent plan via a three-phase process to optimize the outcome of their divorce. Phase 1 is the development of the financial portrait.
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