I’ve been working with “Sheila” for a few months now – developing her divorce financial plan. She’s certainly not a-typical – there is a lot to consider. Three children, a small business, merged retirement investments, and a hefty mortgage. Sheila has a very focused view of her future – and she is determined to achieve her financial goals. My advice to her: while her financial goals are certainly attainable, getting there will require some pretty big changes in her budgeting today.
For Sheila, reducing today’s expenses by selling the family home and downsizing to a smaller place makes the most sense financially. Yes, it is yet another change that she and the children will need to absorb. It could mean changing schools and disrupting children’s neighborhood friendships. In fact, all of the family’s habits and comforts will be disrupted more than it already is. Emotionally, this is a very tough decision. But financially, it is vital to keeping the family on track to their future. As time goes on, there will be college tuitions to pay, weddings to be hosted, cars to be replaced and emergencies handled.
Clients come to me from all walks of life with the same question – “How can I maintain my lifestyle after my divorce?” For some – they simply cannot. Their marital combined income that may have barely supported just one household, will now be split into two. Where once Sheila had her husband on tap for quick household repairs and maintenance, she will now be hiring outside services. Sheila’s husband’s small business allowed him to be available for child care in the afternoons – now afterschool daycare costs need to be added. Not only will Sheila have less money to cover expenses – she will also have more expenses.
This is a time of hard decisions. As the adult in the family you need to be the one to face them- and help everyone, including yourself, move on. Sometimes this very hard decision is the only one that will provide a secure future for all of you.
