Divorce, Debt, and Finances

Tips, Struggles and Successes navigating Divorce, Debt and Finances

What I Wish I Would Have Known Before Divorce...

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What I wish I would have known before divorceCould have, should have, and would have....I hate having to say those words. Could I have handled that situation differently? Why didn't I think of that? Ahhh the regrets....

When it comes to getting a divorce many of us have regrets not necessarily about the divorce but, the financial decisions we make in anger or haste to just get it all over with.

I have consulted some "divorce experts" to weigh in on this important topic and share their advice and experiences.

Take a moment to learn from our mistakes and regrets so you don't make them yourself as you navigate through your divorce.

Budget for replacement items

In my divorce experience, (for those of you who don't know I am currently going through divorce number 2) financial decisions are best made early on, and with a clear head. No I didn't care about the furniture and household items I left at the time of my departure from our marital home, but boy is it expensive to replace those "everyday items" you didn't realize you needed till you go for them one day and they aren't there.

For example the can opener; can't open cans without them and when your child wants Campbell's SpongeBob Soup, right now because they are hungry, well you can only imagine the horror of not having a can opener. Or, today as the snow falls, I realize I have no shovel to clear a path to the car. Trivial items...but necessary to get through the day, and like I said the "little" things add up!

So my advice, "Make a mental or physical list of all those everyday items, take what you can get and make sure you budget for those "replacement" items."

Prepare a statement of Net Worth 

Knowing what you have and actually noting it can go a long way in helping you make financial decisions that can affect the rest of your life. 

"Your attorney or mediator will ask you to prepare a statement of net worth. This is typically a painful and difficult chore, but absolutely essential. Most of us spend beyond our means. Or we really don't know what's been going on financially in the marriage. Assessing your financial assets and liabilities on paper is the first step toward making responsible decisions during the emotionally fraught divorce process." 

Dr. Leah Klungness  @Singlemommyhood

Don't Follow Dad's Leadership 

Charging up your credit cards for the wedding / honeymoon can only lead to financial troubles and possible marital stress; spend what you can afford! 

"On October 8, 2004 I married the woman of my dreams.  She was dressed in white, puffy sleeves, long train and she was smoking hot!  We flew to Disney for our honeymoon, spent a fortune and returned home thousands of dollars in debt!  I was a financial idiot!  I charged my honeymoon on my credit card (thinking I deserved it), I charged a portion of the wedding and even turned down a $10,000.00 offer to go somewhere intimate and have a small wedding."

Chris Spradlin  EpicParentTV  

Here is Chris's financial advice: 

  • Don't follow dad's financial leadership (in the early days)
  • Live below your means
  • Financial margin doesn't mean there is more for you to spend
  • Connect w/ a financial mentor at a young age, give them permission to hold you accountable
  • And to steal from Dave Ramsey, "Live like nobody else today, so that you can live like nobody else later" 

Establish yourself-Financially Speaking 

Not establishing your own credit can hurt you and your spouse upon attempting to purchase a home or apply for loans as a couple, but in the event of a divorce or separation a lack of established credit can be a major issue when it comes to your finances.

"I never realized just how imperative it was to have some of the bills and things that we own in just my name until after my ex and I had broken up. It was a huge headache trying to re-establish myself financially, especially with the bills that were in my ex's name. In fact, my son and I were affected by things that we tend to take for granted like television. After the breakup, we went an entire month without watching television because I had to go through the trouble of having the cable turned over in my name. However, I was lucky that the apartment was paid for with my own money and in my name because during and after our breakup, my ex had no legal rights to it, lest I would have been homeless."

Alicia Harper  MommyDelicious

What If... 

Thinking about the "what if". What if you can't sell the marital home, what if your stock plummets or your 401K takes a beating? Mandy Walker of Since My Divorce shares her experience. 

"When we separated I stayed in the marital home with the kids while we tried to sell it. Our financial agreement basically took the cost of the mortgage and his rental and split that 50-50 but my expenses to maintain that home were much higher. It was a big house. Then I bought another house - a smaller house that needed some repair work before our marital home had sold. I moved into that house and we did eventually rent out the marital home and sold it over two years after our divorce was final. Our agreement assumed that the home would be sold within nine months and didn't cover any of the what ifs.  

By way of background, it may have been smarter for me to wait to buy but  I wanted to buy my house because it was a great fit for us - good size, perfect location, my price range and because then the children wouldn't be living with the uncertainty of where they would be living. It really was a good move for us - the children were a lot more settled and it was a relief not to have to deal with keeping our house in show-ready condition. But at that point, my ex would not move back into the marital home and I didn't push to renegotiate the financial split - he said it was my choice to move.  

The other area was with respect to our retirement benefits - he has a defined benefits pension and I had a 401(k) which we both kept - they were similar in value at the time and I didn't want the additional expense of legal agreements to split them. And I also just wanted to be done with the negotiations. Given what happened to the stock market which was subsequent to our divorce, my 401(k) lost a substantial amount. I think it may have been better to split both of the accounts because I would have had greater protection from the downside risk. Fortunately I'm far enough away from retirement that I'm confident my 401(k) will recover and with all the talk about the insolvency of state pensions, his benefit may end up being changed. This was the final negotiation point in our settlement and as I said, by then I just wanted to be done. So the other lesson, is don't allow yourself to get worn down and settle for a division because you want to be done. Take your time and think it through. Think through everything that could go wrong and what the impact will be on you. 

A friend of mine had agreed to give her ex a percentage of her 401(k) and when the agreement was drawn up it was expressed as a dollar amount. When it came time to split the account, the value had fallen and she was still locked into giving him the fixed dollar amount."

Mandy Walker  Since My Divorce

What do you wish you would have known? Do you have regrets? Please share your experiences in the comments!

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Suzanne Cramer

Suzanne is a certified credit counselor working in our Ask the Expert forums as a coach and a Social Media Specialist for CareOne. Suzanne writes for our Divorce, Debt and Finances and A Straight Talk on Debt blogs.  As a soon to be divorced single mom, Suzanne also writes for the Divorce, Debt, and Finances blog. Ask her questions, share your story or just follow Suzanne on her journey as she navigates dealing with divorce, debt, and finances. Suzanne is also very active on Twitter and manages two CareOne accounts: ADivorcedMom and Ask CareOne where she shares the latest debt industry news and tips to keep your finances in check.

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  • Desperate times call for desperate measures--like living with your ex because you can't afford not to. Today's economy has taken its toll on the best of us, leaving some couples unable to physically separate for financial reasons. So how do you make it

  • What I Wish I Would Have Known Before Divorce...

  • What I Wish I Would Have Known Before Divorce...

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