Breaking Bonds, page 22
Now that you are divorced, you need to start saying no and to stop worrying about other people’s feelings when you do. There is a lot of power in that little word: No. It’s a whole sentence in two letters. Try to use it without defending or explaining yourself. See how that feels. Initially, it may feel awkward to say it, and then very empowering. Practice makes perfect.
Start saying no to your children, and be consistent. Tell them that your financial situation has changed and there are limits to what you can give them and what they can do. If you were too permissive in the past, explain that things are going to change now. They may not like everything this means. Tell that that it is OK for them to get upset or even angry, but that they will still need to respect your wishes as you are in charge and doing the best you can.
Your children need boundaries. Do not give in if you have said no or there will be constant arguments to turn every no into a yes. Make sure that they learn how to deal with negative emotions appropriately. They will only treat you with respect if you demand it. Tell them that you love them and that no still means no. Initially, they likely are going to push your buttons. My children knew just how to push mine. But I guess that I had finally reached the point where enough was enough. I have a much better, more authentic relationship with my children now that I stand up for myself. They respect me more. Give yours the opportunity to realize that you are just another human being, and you have needs and rights, too. They will become better people for this lesson, not selfish, as they may have been trained to be by their father. I was surprised at how quickly my children came around and accepted the new me when I said no.
It is time to change your relationships with other people as well. Stop saying yes to every request for your time, money, or attention. While you are in transition, you need to focus on taking care of yourself and your children. Just say, “I can’t help you, but thank you for thinking of me.” No excuses, no explanations. If they ask you why not, don’t answer. It’s not necessary.
Sometimes when people ask me a question that I think is inappropriate, I will respond, “Why do you ask?” Other times, I just smile and don’t answer it. The way I see it, I don’t owe them anything. Neither do you. They should respect your right to say what you mean.
FOLLOW UP
“The way to right wrongs is to turn the light of truth
upon them.”
―IDA B. WELLS-BARNETT
Once the divorce is final, it is your job to make sure that your husband’s name is removed from titles, deeds, credit card accounts, investment accounts, and any other accounts that you receive in the divorce settlement. Submit updated beneficiary designation forms on your retirement plan, stock purchase plan, deferred compensation plan, annuities, and life insurance policies as soon as possible after the divorce is granted. Then make sure that the changes were made.
Organize your records. If you have a financial advisor, ask for help. Provide him or her with a certified copy of the divorce decree signed by the judge. Do not expect your attorney to take care of changing titles for you. He or she may be willing to prepare quitclaim deeds on your real estate, or refer you to a real estate attorney to prepare and record these documents. It is up to you, however, to follow up and make sure that these things are taken care of properly.
Also, don’t forget to keep ordering and carefully reading credit reports on your credit history every four months so that you can address any issues that may arise.
Set the appointment with an estate attorney to update your will as soon as possible, as well as your power of attorney and health care power of attorney, if you haven’t already. You will need to use an attorney who specializes in estate law to prepare all three of these documents.
Have a lock box in your name at the bank to secure your important legal documents, such as your will, insurance policies, car titles, deeds, and so on. Destroy the old estate documents with a paper shredder. Consider whom you would want as a joint signer on the lock box in case something happens to you.
Change the locks on your doors if you will remain in the family home and haven’t done so. Install a fireproof safe in your home to hold your power of attorney, health care power of attorney, a copy of your will, and copies of your insurance policies and other documents. Keep an updated list of your assets and liabilities, including bank account and brokerage account numbers, credit card account numbers, and online passwords in your fireproof safe. Indicate on the list if you have any bills automatically paid from your bank accounts. If you have a separate safe for jewelry and your bank lock box keys, indicate the code for it on the list. My adult daughter knows where the key to my safe is so that she has access to it if something should happen to me.
Do not leave the originals of your power of attorney or health care power of attorney in your lock box at the bank, as they will not be accessible when most needed. Keep both of these documents in your fireproof safe and make sure that the person you have designated to be your proxy decision maker knows where to find them. Bring the health care power of attorney with you if you go to the hospital. The administrators will make a copy of it for their files. It won’t do you any good sitting in the bank if you are in a serious accident or have a sudden illness.
Although you may be able to change your legal name back to your maiden name in the divorce decree, you may want to wait at least a year before you make that decision. You don’t want to make a drastic change that you regret later, so you should be completely sure that is what you want to do. It takes a lot of work to change your name on everything, and there are many other, more important things that you must take care of first.
Put all your ex-husband’s emails and your emails to him, and emails to and from your attorney in a separate archived email folder. Keep these for at least five years, just in case he decides to take you back to court. It is important to keep them segregated so that you don’t accidentally open one. Don’t look back unless you must.
Put all emailed PDF documents and spreadsheets related to the divorce in a separate folder on your computer, so that you have all those items in one place, in case you need to revisit them. Keep in mind that you could have an IRS audit of a previously filed joint tax return, so you will need to keep tax-related or employment records for up to seven years.
Put all the paper documents related to the divorce in waterproof plastic containers and store these in the basement or garage. Ten years from now, they can be shredded and forgotten. Keep a copy of the divorce decree and any pension information with your other important papers, just in case they are needed.
BUDGET BASICS
“Do what you can, where you are, with what you have.”
―THEODORE ROOSEVELT
The chances are that your financial picture has changed with the divorce, and not for the better. So be careful about making big splurges to pamper yourself for the time being. If you can’t afford it, you are going to regret splurging later. I took a short, inexpensive trip after my divorce decree was final, which was something I knew that I could reasonably afford to do.
Please also wait at least a year before you consider plastic surgery, liposuction, or other expensive cosmetic procedures so that you avoid making decisions that have unintended consequences. If you are thinking about having an expensive elective surgery out of insecurity over your appearance or at the prospect of living alone, you would be better served spending money on a good therapist. The real work that you need to do is on the inside, not the outside.
Make sure that any financial assets you received in the divorce settlement last as long as possible and are invested to help you achieve your short-term and long-term goals. Prioritize these goals to see what is most important and realistically achievable. Set up and then live within your new budget. Taking control of your money will make you feel calmer and more empowered. Consult a financial advisor for help with budgeting, retirement planning, insurance planning, and college savings. Before you make a big expenditure, consult with your advisor to see if you can afford the expense based on your other needs and goals.
It amazes me how easily I can fritter away money without realizing it if I don’t consistently pay attention. Debit cards, as well as credit cards, are an easy way to get into trouble since many people don’t keep as close track of what they spend as they do when paying with cash. If you need to make cuts in spending, then you must track where your money is going. Eliminate snacks and processed food. It is much better for your health to allocate your food dollars to fresh fruits and vegetables.
Bottled water is wasteful, bad for the environment, and costly. Get a water pitcher with a Brita filter instead. Eliminate sodas; they are harmful to your family’s diet and your teeth. Diet sodas cause cravings for sugar, so eliminate them as well.
Use cash instead of mindlessly using your debit or credit cards for discretionary weekly spending, which can easily get out of control. When the cash runs out, stop spending until the next week. Clip coupons or print them online and make a grocery list every week before you go shopping. Only buy what is on the list. Make a game of going through the coupons in your Sunday paper with your children to see how much you can save. You will be teaching them invaluable lessons about money as a limited resource that they must allocate wisely.
Remember, the less money you spend on groceries, the more you will have to spend on other things that your kids may need or want.
Cook on the weekends, and freeze leftovers for meals during the week. Or cook every other day, and have leftovers every other night. Plan menus for the week before you go to the grocery store. Buy bags of apples and store-brand cans of low-salt almonds for healthy snacks.
If you can afford to take the children out to dinner once a week or once a month, order water instead of soda at the restaurant. It is not only healthier, but your restaurant bills will be a lot lower. I go out to lunch or dinner occasionally with a friend or a client, and I notice a big increase in my credit card bill if I overdo it, especially if I have a glass or two of wine.
Take control of your spending. Like all of us, you have a limited amount of resources, so be aware of how you spend yours. Find a way to live within your new budget and start saving for your retirement. Nobody else is going to do this for you.
Do your best to anticipate upcoming expenses, such as birthdays or insurance payments. Plan for such expenses in your budget. Delay large purchases for several months or wait to buy big-ticket items until you can pay for them in cash.
Instant gratification can have a large price tag. But it will be easier for you to make minor adjustments and cutbacks rather than to stop going out entirely until the credit card debt is paid. Consider going to the movies once a month instead of every week. Matinees are cheaper and just as fun as late-night shows. Skip the pricey concessions and bring along a plastic bag with low-salt almonds or other nuts, as a snack. Have a pizza night and watch a movie at home with the children on a Friday or Saturday night. Make conscious decisions about how you spend your money.
Of course, you need to have some fun in your life, so make changes in moderation, and you will have a greater likelihood of being successful. There are many things you can do, such as having a picnic, bowling, visiting a park, or playing cards or games as a family, which cost little or no money. Bring your lunch to work. Not only will this help you keep off weight, but it will also save you money. Your children should bring their lunches to school as well.
Limit how often you eat out by marking it on a calendar. Consider going to some less expensive restaurants when you do. I occasionally have potluck suppers with friends. It is less expensive than going out, and we have a better time, too. Also, I go to my local used bookstore frequently and trade in books that I no longer wish to keep for new, used ones.
Cancel unnecessary magazine and periodical subscriptions. Shop at discount stores like Sam’s Club and Costco for paper products and dry goods, which are considerably cheaper if you buy them in bulk. Be willing to try more store brand products as many of them are manufactured by brand-name companies, anyway. And be careful not to buy things you don’t need just because they are on sale. Remember that you are still spending money when you buy them.
Consider sometimes going to used clothing stores or designer used clothing stores for part of your wardrobe. In concession stores, I sometimes find items that still have the price tag on them. I don’t buy used shoes, but I have bought several slightly used coats, jackets, and leather handbags over the years for a fraction of what they would have cost at a department store.
Your children pay attention to how you handle money, so do it wisely. My good spending habits have been ingrained since childhood, as my parents had limited resources. I believe I recovered financially from my divorce more quickly because of that.
Stop buying the children gifts out of guilt for Christmas or birthdays. Set a dollar amount that you can afford to spend for each child and do not exceed that amount. Set realistic expectations. If necessary, explain to your children that there is a limited amount of money this year and that you hope it will be better next year. It is important for them to realize that they are not entitled to get everything that they want when they want it. Teach them that happiness does not come from having everything that they want, but from being happy with what they have. It is not your job to give your children things that other children have, but to give them what they need, which is mostly your attention.
For your siblings and their families, send a family gift instead of one for each member. Or better yet, draw straws and send only one family a family gift. Let them know beforehand that your customary gift giving is going to change.
Build up an emergency reserve fund of six to nine months of living expenses in a bank savings account, and then start saving for your retirement, if you haven’t already. Fund your retirement plan at work as much as you can afford it. It will come out of your paycheck and won’t be as painful as you think because it is being taken before taxes. Have an additional bank draft from your checking account to an investment account scheduled for shortly after your paycheck is deposited. It is a great way to build up a nest egg over time. You will be more successful if it is set up to happen each month automatically rather than writing a check for it. Something will invariably come up every month so that you either don’t do it or forget about it. Make the decision once on a bank draft for an amount you can afford, and it’s done. You will feel better if you are taking care of yourself and making progress. So, do it. Every time you get a raise, increase the percentage that you invest in your 401(k) plan or 403(b) plan until you reach the maximum allowed amount.
Your marital status as of year end, December 31, will determine your filing status for that tax year. Filing a joint return does give you added tax benefits, including eligibility for certain tax credits and deductions. Normally, income drops after the divorce, but the tax rate as a single filer is usually higher than as married and filing jointly. Once you are divorced, you may be able to file as head of household instead of as a single person, a status that has a few potential benefits. There are several requirements for this, so consult your tax advisor.
Alimony you receive is no longer considered to be taxable income. As a single filer, you still may need to either make estimated quarterly tax payments or increase your withholding on your income from work to avoid penalties for underpayment of taxes. Ask your tax person.
Child support payments are not taxable, so you do not have to report them on your tax return. You can claim a child as a dependent if you have legal custody. You may be able to release your right to claim your child as a dependent for tax benefits to the noncustodial parent, but you should have a very good reason for doing so if you do. You may also be eligible to claim a child tax credit if you claim your child as a dependent.
MONEY MAKER
“If you can dream it, you can achieve it.”
―ZIG ZIGLAR
If you receive alimony, remember that it lasts for a limited amount of time, so you need to become self-reliant as soon as possible. You must figure out how to support yourself and your children. You may have set aside your career to raise your children and take care of your husband, a decision that has taken you out of the full-time workforce for years. The good news is that you are still capable of getting a job or starting your own business, and earning money. Your future is up to you, so give serious thought about what you would like to do for a living, and then act. Update your resume and make it happen. Becoming independent will do wonders for your self-esteem.
Do you have the education you need to get the job you want? The higher the level of education you possess, the more marketable your skills are likely to be and the higher your income. If you don’t have a high school education, contact your local YWCA for general educational development (GED) classes, which are available during the day, in the evening, and on Saturdays. A GED diploma is considered the equivalent of a high school diploma.
Or you could train for a specific trade or craft. Trade schools take a shorter period to complete than college, are less expensive, are more flexible in scheduling, and usually have job placement available at the end. With trade schools, you earn a certificate of completion. If you eventually want to get a job that requires a college degree, consider going directly to college instead of trade school, even though it may take longer to complete it.
You will probably qualify for financial aid for a two- or four-year college degree if your resources are limited. Try to get some on the job training in your field before you graduate. Many part-time internships are available that can improve your skills. Community colleges offer classes for working adults looking to change careers. You may also find free online classes.
