Money mistakes during divorce
Good morning!
Today, want to mix things up a bit...
If you've been following along for a while, you may have listened to my podcast episode with money coach, Christine Luken, in September last year.
If you missed them, you can catch up here:
I've enjoyed getting to know Christine and learning more about the work she does and her unique perspective (and personal experience) when it comes to money.
With that in mind, I'm happy to share a guest contribution from Christine this week:
3 Emotional Money Mistakes During Divorce
Divorce is one of the most emotional life changes any woman will experience. And when negative emotions like anger, anxiety, or fear run high, so is the likelihood of making financial mistakes with long-lasting consequences. Here are the three most common emotional money mistakes made during divorce, and how to avoid them.
Money as a Weapon During Divorce
The emotion of anger is common during divorce. This is the “fight response” to stress. You might be justified in feeling this way, especially if your ex has deeply wronged you. If you’re tempted to use money as a weapon, remember anger is a two-edged sword that cuts both ways. And it can cause you significant financial damage!
Reckless spending of joint money or your settlement funds will mean less security later. The trick is to release your anger without hurting yourself or others. I often suggest physical activities like running or kickboxing as productive ways to move the angry energy out of your body.
Giving Away the Store
This is the “flight response” to stress. You’re ready to agree to anything and everything your ex wants, just to get the divorce over. If you’re someone who dislikes conflict, this feels like the easiest response. However, if you don’t stand up for yourself to get your fair share of the financial assets now, you might regret it later. And it’s costly and time consuming to amend custody and support agreements later.
Deer in the Headlights
Anxiety can be paralyzing, causing women to freeze in their tracks, unable to make decisions and take forward action. This is the “freeze response” to stress, and it can be more dangerous than the other two. Why? Because if you don’t take steps to protect and preserve yourself financially, you’ll eventually be forced down a path of action that might not be the best one for you. Not making a decision IS a decision! If you find yourself frozen because of overwhelm or confusion, ask yourself this question: “Will more information help me take action?” If not, you’re likely overwhelmed and need to take baby steps. If yes, reach out to your attorney or financial planner for guidance and clarification.
Christine Luken, the Financial Dignity® Coach, is a Certified Divorce Specialist™ with 14 years of experience and the author of Financial Dignity® After Divorce: A Woman's Guide to Healing Her Relationship with Money
Please hit reply and let me know what you think.
Whether you're single or happily married, you almost certainly know someone that's dealt with divorce. Feel free to forward this email to them as it might be just what they need.
And let me know if you like the idea of occasional guest contributions here in the weekly newsletter.
Links & things
As you transition from "vocation to vacation" and enter into retirement, it might not be all you envisioned. Here are some thoughts on surviving your first year in retirement from my latest blog post:
I'd like to introduce you to the Money Egg. It's an exercise designed to help you explore your personal relationship with money. If you want to give it a shot, here are the instructions (be sure to note the part about doing all this with your non-dominant hand):
Also, if you create your own money egg and would like to discuss it, I'd be happy to. Just let me know.
Many of you have asked me over the years - and recently - about whether dividend investing is a good approach for generating income in retirement. I'm not a fan for several reasons, many of which are highlighted in this piece from Vanguard:
Thank you, as always, for reading.
And if you have any questions or an idea for a future newsletter, blog post, or YouTube video, I'd love your input.
Just hit reply - I read (and appreciate) every email you send.
Until next Wednesday,
Russ