(photo credit: Thinkstock/Imagebank)
‘You’ll never make it without me,” is the a hateful and unfortunately common
emotional dagger thrown by an angry husband at his soon-to-be ex-wife, going
through divorce proceedings. While many readers are gearing up for next week’s
resumption of the summer wedding season, I have spent countless hours counseling
a couple of recently divorced women to get on their feet
Each of the women told me that their ex-husbands used the
“You’ll never make it without me” line, adding that it was such a devastating
thing to hear, they are using it as motivation to get their finances on track
and become financially independent for the first times in their adult
For many divorced women, their new financial reality can be
intimidating. The need to coordinate a multitude of professionals, including
accountants, lawyers, financial advisers and insurance agents, often means
running themselves ragged because they are doing this while trying to hold down
a job and raise the children.
One of the women I am working with has five
small children, a three-quarters-time job and is spending all her “free” time
trying to make sense of the mess her ex made, including taking out loans in her
name, maxing out credit cards and sticking her with the debt, etc. How does she
have time? Thankfully she has a great support system of people helping her with
babysitting, making meals and even shopping for her.
Here are some money
tips for women having gone or going through a divorce.
Tip No. 1: Take
stock The first thing a divorcee needs to do is get her hands around the budget.
This is the first step toward financial empowerment. Many clients have told me
that by doing this relatively simple exercise, they feel they gained a level of
financial control they never assumed they would have.
whether you kept a budget while married isn’t relevant. You are going to have a
whole new set of expenses and will probably have different sources and levels of
income than you had previously. Break your expenses down to those that are
monthly and those that are annual.
Once you have that organized, write
down all of your various sources of income, salary, child support, National
Insurance Institute payments (Bituach Leumi), etc.
What’s important in
budgeting is to let your income drive your expenses. This means that once you
know how much money enters your bank account each month, create a budget that
limits your spending to the amount of income you have. While this seems basic,
most individuals let their expenses drive the process, meaning that they spend
money without discipline and hope that at the end of the month they don’t go
Understanding your budget can also play a major part in
the asset division during your divorce proceedings. A wellknown family-law
expert recently told me much aggravation and time would be saved if women knew
how much money they needed to live off of. With this information, women can
avoid spending years and thousands of dollars fighting for every last penny. If
you know how much you need to live, you’ll know how much money to ask
Tip No. 2: Invest lump sums As part of a divorce settlement, many
women come into large lump sums of money and have no idea of what to do with it.
It’s important that this money is used to help meet any financial goals that you
may have. If after doing your budget you see that you will need more income to
make ends meet, then you will want to make sure that your money is invested in a
way that can maximize the amount of income produced, while preserving or even
growing your portfolio.
Tip No. 3: Take charge For many this new
situation is actually therapeutic. According to family mediator Kathleen
O’Connell Corcoran, PhD, “After divorce, women experience less stress and better
adjustment in general than do men. The reasons for this are that (1) women are
more likely to notice marital problems and to feel relief when such problems
end, (2) women are more likely than men to rely on social support systems and
help from others, and (3) women are more likely to experience an increase in
self-esteem when they divorce and add new roles to their lives.”
newfound independence and take control of your new financial reality. Speak with
a financial adviser and create a plan that will enable you to get on with your
life and be financially firstname.lastname@example.org Aaron
Katsman is a licensed financial adviser in Israel and the United States who
helps people with US investment accounts.