When asked ‘how healthy is your financial future’ what comes to mind? Are your thoughts more positive or negative in nature? Have you ever wondered why when making financial decisions you choose to take time to think it through verse rushing into a decision? And even then sometimes you still are unable to make a decision!
Your financial concerns/fears can stop you dead-in-your-tracks and can even jeopardize your financial success. Financial decisions are a cognitively based process and financial fears are emotional based stimuli. Your financial fears and past financial experiences play a significant role in your ability to successfully analyze your options in making your decisions. What are some common financial concerns/fears you might encounter during your divorce process? What assets and debts should you choose to take as your financial marital estate division? Post-divorce how will you be able to financially provide for your new ‘single’ lifestyle?
Some financial fears that could limit your financial divorce decision making process are:
- Concerns of not having enough money to pay for_____________.
- Having to be responsible for payment of outstanding marital debts (credit cards, existing loans in our names)
- Where are you going to live post-divorce and how can you afford it? Should you consider downsizing to a smaller home or renting for a while?
- Will you be able to qualify for a home loan post divorce as a single person with only your sole income?
- What does your future lifestyle look like? Will you be able to continue living life doing all the things you enjoy doing once divorced and single?
- Will you have enough money for your future retirement needs?
- Is your current job/career going to provide enough for your future financial needs? Should you be considering going back to school to enhance your my career possibilities?
Even in these challenging times of uncertainty, there is ‘hope’ and light at the end of your tunnel. Rome wasn’t built in one day and you need not feel rushed into making hasty financial decisions concerning your divorce. You do not have to do this alone. A financial divorce professional can help you unravel all these mysteries and help you make sense of your financial questions. The collaborative family law divorce method has a neutral financial divorce expert as part of your ‘divorce team’. A collaborative family law financial neutral is a divorce financial specialist who is trained to impartially help both you & your spouse sift through your marital financial information. Helping each of you analyze your post divorce budget projections and asking you thought provoking critical questions to consider while you and your attorney strategize your marital estate division partition.
Preparing an estimated post-divorce budget, analyzing your current and future net earning capacity and consider what adjustments your future lifestyle will entail is a great starting point. Preparing a post-divorce budget prior to being divorce will help you determine:
- If you will be financially able to continue your current lifestyle or what necessary adjustment must you consider, and
- If you’re current income source (job) will continue to sustain your present and future financial needs.
Don’t be discouraged if you have to ‘tweak’ your estimated future budget numerous times. It can be dishearten to realize that you can’t afford to keep your present residence and might have to downsize for awhile. But it’s better to be prepared and know what financial challenges you will face verses having to deal with an unsuspecting financial crisis. After considering your short-term (one to three years) financial scenario and post-divorce financial goals, it is time to look at your long-term (retirement) estimated financial portfolio.
What assets and debts do you and your spouse presently own as marital property? It’s best to prepare an accurate inventory of everything owned and owed to date within the marriage. The neutral financial divorce expert member of your collaborative divorce team will assist both of you in creating this current marital inventory of assets and debts. Also, a financial investment advisor can be helpful in determining how much money you currently need in order to reach your long-term financial retirement goals. With this information you will be better equipped in knowing what marital assets and debts your desire post-divorce.
Now that you have analyzed your ‘financial health’ and have gained knowledge concerning your short-term as well as long-term financial portfolios, you are in a position to move forward with your financial decisions with confidence. Preparing now for your financial future will give you a sense of security. Knowledge is a powerful ally. Knowing how your financial future will play out helps you make better choices during your divorce negotiation process and gives you the knowledge necessary to have confidence in your decision making process.