Charles Cardenas
RPS Retirement Planning Systems of South Texas
Financial Planning for the Divorced Woman: You are in Control!
Women need to understand their rights in a divorce
“The impact a divorce has on women’s finances cannot be overstated. The financial literacy gap, the lack of involvement in long-term financial planning during their marriage, and their higher likelihood to end up in poverty place divorced women in a vulnerable position.” -Worthy.comIf you’re a woman, who is divorced, in the process of divorcing, or is contemplating a divorce in the near future, understanding a few key things about the financial implications of a marital dissolution will go a long way toward helping you regain the confidence you need to take control of your wealth.After a divorce, some women, especially those whose spouses were in charge of the household finances; find themselves in the confusing and uncomfortable position of having to learn personal finance from scratch. They now have no choice except to take responsibility for earning, saving, paying bills, and investing for retirement.It’s unfortunate that many divorced women find themselves faced with some unpleasant and unanticipated realities in their post-marriage lives. For example, women often greatly underestimate the costs involved in the divorce process itself. The website Divorcestatistics.info puts the average cost of a divorce in America at around $15,000.Beyond the legal costs, things such as lack of financial literacy, standard office expenses, the need to hire valuation and other financial experts, and even the emotional states of the divorcing couple can contribute to the high price tag a divorce usually carries.Divorcing women face other nasty surprises• Health insurance costs are often more than they envisioned. Usually, divorced women will have to pay their health insurance premiums, which can be staggering. Nationally, health insurance premiums have been increasing by an average of 5% every year, for the last six years. In some states, coverage for a single woman can run over $1,000 per month!• They need to find a job as soon as they can. Economic necessity can mean that some divorced women will see they need to start working quickly. Those who were stay-at-home wives and mothers may not have had time to acquire new skill sets or update their existing skills, making it difficult to get hired or get better wages.• They could find themselves homeless. In a typical divorce, the family home can be the most valuable financial asset as well as a big bone of contention. If divorcing women do want to stay in the home because they have young children or due to an emotional attachment, they may have to fight to keep it. Fighting with an ex-spouse over the home is an expensive and time-consuming process that could quickly deplete any savings and create even more stress.• Alimony and/or child support is not what they thought it would be. For whatever reason, some divorced women overestimate how much money they feel their ex-spouse should pay in spousal or child support. The amounts arrived at during the divorce process may be much, much less than anticipated.These and other unwelcome surprises in the aftermath of a divorce don’t have to spell disaster, though. With a little pro-active “divorce planning,” you can lessen the sting of the process and begin to regain control over your financial future.Divorce planning may, at first blush, seem a bit cynical. But, when you consider that many women can see divorce on the horizon, usually long before it occurs, it makes sense to be prepared. Some of these same ideas will also apply if you are already divorced or in the middle of the proceedings.Add up the household expenses. Don’t be afraid to sit down and calculate the debts and recurring bills. If your spouse is currently doing the finances, you should insist that he sit down with you and go over the balance sheet.You must know the location of all relevant financial documents and statements. It’s a good idea to start a spreadsheet with the company name and website, login information (if you pay bills online), minimum amount due, due date, customer service phone number, and other pertinent information.While it’s true you may find all this tedious and boring, and it could lead to quarrels, you must remember that your financial future is at stake. You need to know exactly what’s going on with your money. Learn the true cost of your health insurance.Many times, we don’t think very much about how much we pay in premiums because our company, or our spouse’s company, pays the lion’s share. You need to know exactly how much you’ll spend when and if you are dropped from your ex-spouse’s healthcare plan. Some states are participating in expanded Medi-cal or subsidized healthcare offer sites where you can calculate premiums. If you do not qualify for subsidies, you can use online quote machines to determine how much private insurance will cost.Also, if you have children, you should find out how much it will cost you to insure them as well, just in case you wind up with those bills. Hone your job skills or learn new ones.Many women see an upside to divorce in that it can provide them with the chance for a fresh start in their professional lives or allow them to do what’s necessary to advance in their current careers.Check with your state employment development office to see if there are training programs available to you. Some of these may even provide free or low-cost childcare if needed.And, if you’re already working, sit down with your boss and discuss what you’ll need to do to move up in the company and earn a higher rate of pay. Decide BEFORE the divorce if it will be worth it to keep your home.The family home is an emotion-charged piece of marital property, mainly if children are involved. While you may want to keep the house for sentimental reasons or because of your children, the financial costs may be far more than you can handle. It’s important to look at the pros and cons of keeping the house before you find yourself in a draining tug of war with your ex-spouse. Find a trustworthy, knowledgeable financial professional to help youEven with the support of family, friends, and colleagues, divorced women can feel alone and unsure of themselves. That’s why they may sometimes turn to their divorce attorney for help with money matters.But, although most attorneys know the basics of post-divorce finance, they usually are focused on practicing law and not on financial planning. That’s one reason to find a dedicated financial advisor to assist you.Having a trusted financial planner who understands your situation and can help guide you goes a long way toward increasing your peace of mind as you transition out of married life.A good advisor is concerned with your financial and emotional well-being and is also able to tell you the unvarnished truth about where you stand post-divorce.The ideal post-divorce advisor doesn’t necessarily need to be a specialist in divorce (although some are) but, they should be compassionate and caring while guiding you to a better financial future.In all of this, it’s important to remember: you are not alone and you CAN take control. Resources, support groups, friends, family, and professional contacts can help take the sting from divorce and get you on track to a new, more prosperous life.
SD, LC![Charles Cardenas picture](/pictures/265/picture-536bfb736bbefaa8.jpg)
Charles Cardenas
RPS Retirement Planning Systems of South Texas
212 W 3rd St
Weslaco, Texas 78596
charles.cardenas@retirevillage.com
(956) 463-6862
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