A view of the ancient city of Toledo, Spain, spread out like a page from a storybook, seen from our hotel window. A lifelong dream to tour Spain-realized with my month-long vacation last fall.

Me? Take a month-long vacation? Not possible, I told myself for a long time. I’m self-employed. I’ve never been anywhere for a whole month. My clients need me. I do speak Spanish, but to be away for that long? Yadda yadda yadda. All the reasons why I couldn’t possibly.
But I’ll confess, I actually do take my own advice sometimes! And the advice I took years ago was to save. I save 10% from every paycheck. That’s MY money. Not for bills, not for the house, not for anything, really, just to have for FREEDOM. And it’s my freedom money that enabled this trip.

A 7 day tour with an alumni group in Catalonia, 90 minutes north of Barcelona with my ‘significant other’, followed by another week or so of travelling on our own to Pamplona and Madrid. And then he went home, and I had the extra gift of 10 days travelling in Spain with my adult daughter in Madrid, Toledo, Granada.

I/we visited so many of the places I’ve studied throughout my life, as a Spanish speaker, a Spanish major in college, and a Spanish teacher (junior high and college) before I became a financial professional. Truly a lifelong ambition, the top item on my ‘bucket list’. And I did it.

With the power of intention- Yes, I can! And the power of saving. When I started my freedom account, I didn’t have any specific thing in mind. Maybe you will- whatever you dream of: travel? Buying a house? A musical instrument with lessons to learn to play? A friend of mine has a ‘tummy-tuck fund’. Whatever you want can be possible with those two things: An intention, and enough money to fund your dream.

Is it selfish to put aside some money for yourself? Maybe. And maybe we need to revisit the definition of ‘selfish’. Taking care of ‘self’ is not a bad thing, not something to feel guilty about. But that’s a story for another time…

For now- I invite you to start saving. It doesn’t have to be much, but it helps if it’s regular. Something from every paycheck, every week/biweekly/monthly. In an account with just your name on it.

Start now- and see where it takes you when you are ready. The results can be amazing! In Spanish, Maravilloso!

Let’s create a Financial Freedom Plan with YOU at the center! Schedule your free Financial Clarity session today so we can help YOU create a financial freedom plan – www.calendly.com/ContactAGrace

1.  Are you eligible to claim your children as dependents?  This is usually clarified in the divorce settlement agreement, but that’s not quite enough.  The IRS has a required form: Form 8332- Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent.  The must be reviewed, signed and attached to both of your tax returns.  Go to www.irs.gov for a copy of the form and more information.
2. Did you remember that you can alternate who claims your children as dependents from year to year?  A child can be claimed as your dependent long as he/she is under age 19 (on Dec 31) and lives with you for more than half of the year, or is a full time student up to age 24.
3. What status will you use to file your taxes?  If you were divorced by 12/31, married filing jointly is no longer an option.  You can choose between single and head of household.  Check with your tax preparer to see which works better for you.
4. Are you receiving or paying alimony/spousal maintenance?

Remember that alimony is taxable to the recipient and a tax deduction to the person who’s paying.  If this is the first year you are receiving maintenance, and you haven’t been putting money aside for your tax bill, brace yourself for the shock, and start saving now.  You can open a savings account for taxes, and have money transferred monthly from your checking account, to minimize this problem going forward.  Discuss this with your tax preparer, to see if you need to make estimated payments during the year.

Child support is tax-neutral: it’s not taxable to the recipient, and it’s not tax deductible to the person who’s paying.

Your first tax return after your divorce, is just one more step on your journey to financial freedom.

Now that you’ve opened up about money with each other, it’s time to take a closer look. If you keep your finances separate, before you get together to discuss finances as a couple, check out what’s going on with your own. Ask your partner to do the same prep work, so you both can come to the table with up-to-date information.

You can do this.  It’s helpful to know that your partner is tackling this, too.  If you hold your accounts jointly, decide who will gather up the documents, or do it together.

• Start by writing down all of your debts: student loans, credit cards, car payments, etc. Be sure to include the APR (interest and fees) on all of them. Tip: Sometimes your credit card APR is on the last pages of your statement, so don’t worry if it doesn’t jump out at you when you check. Don’t edit to spare your feelings.  Truth.
• Then log all of your income, even if your spouse is the primary wage-earner. If you are paid a set salary this is easy.  If you work freelance, hourly or multiple jobs, or have a side hustle, look back over the last 12–18 months.  List each month individually. This can help you identify cycles/trends in your income as well as the average monthly amount.
• Don’t forget savings, life insurance, child support, 401K, etc.

Set your Money Date to review the financial work you’ve prepared.

Pick a comfortable time and place, free from distractions. Perhaps a local coffee shop, or this might be better spread  out on the dining room table. If you have kids, get a sitter or if they are young, after they’ve gone to bed. And make this a no cell phone, no tv  time.

Be open and non-judgmental

Create a judgment-free zone and bring an open mind. Nearly 38 percent of couples were only somewhat or not at all aware of their significant other’s debts or income! So you’re not alone if there are surprises here.

Start with now, then plan for later

This Money Date is about where each of you is, individually. If you already have common assets, that can be a part of the discussion too, but stay focused on the present more than the future. This an appraisal of now.  Once you know where you stand, then set a separate date for planning your future. Try scheduling a monthly Money Date until you get comfortable. Then you can move to quarterly, or even yearly goal setting getaways, if that makes sense. Tax time is a natural, as the yearly summaries come in.

Reward yourselves afterward

Money Dates can be a bit of work, and they can be stressful.  Unexpected emotional issues can arise; Important insights appear into each other, and maybe some tension, as well.  So try to plan something fun to do together after your Money Date business is complete. Grab a glass of wine, go for a drive, see a funny movie, get some ice cream.  Rewarding yourselves by creating a fun ritual may actually get you excited for all your future Money Dates.

If you’d like to discuss any of these helpful tips, schedule a Financial Clarity session with me at www.calendly.com/contactAGrace.

Write up a brief history of your relationship with money for your partner. Think through the issues above.  What are some of your biggest financial fears or expectations? What are your short-term and long-term financial goals?

Choose a quiet place for this date, where you can share your feelings and fears.  A quiet spot in your own home, with a bottle of wine and lots of pillows- that may be where you bring out these thoughts. Perhaps you start with a walk in the park, and then settle down at a picnic table to talk. Deep feelings can surface- and that’s what we want to share.   Anywhere you can talk, share, feel and express those feelings comfortably will do nicely.

Most people don’t take the time or maybe don’t have the courage to look closely at their feelings about money.  Human beings created the concept of money, and then many of us let it rule our lives. You can take control, and build a strong and resilient relationship with your partner, harnessing its power.  This is financial intimacy. This can help cement your love into the foundation you can build your relationship on, honest and strong. 

Enjoy these moments.  

And then tune in for: Money Date: A New Look at Finance and Romance. Part Three.

If you’d like to discuss any of these helpful tips, schedule a Financial Clarity session with me at www.calendly.com/contactAGrace.

We seek self-fulfillment and personal satisfaction in marriage. We value open and continued
communication, and that may be hard to come by after decades of combining work and home
responsibilities and the demands of child care. About 1/3 of married people have admitted to
financial infidelity- lying about spending, or hiding money from a spouse. Money issues are a
higher indicator of break-up than issues around sex! (Yes, really.)

If you are 65 now, you can expect to live another 20-25 years. Big life changes like an empty
nest, retirement, or the death of a friend can lead to serious reassessment of a relationship that
is less than ideal.

Getting a Divorce Late in Life Has Additional Financial Consequences

Going it alone late in life may offer freedom, but that comes with many challenges. Retirement
funds earmarked for the you as a couple, won’t go as far to support two separate households.
Dividing the number scramble of plans (401k,403b, 457), as well as pensions, IRA’s,
investments and all your marital assets is a very complex process.

Make certain your health and financial houses are in order for the best outcome in your new life.
A Divorce Financial Planner can help you determine how long your assets will last and what
adjustments are needed for continued financial stability. Divorce also underscores the need for
careful estate planning – especially if you have children.

Any divorce is challenging, but in many ways, grey divorce presents the most difficult hurdles of
all. Be sure to hire a qualified divorce team to help you achieve a settlement that recognizes
your unique position while ensuring your financial stability in both the short and long-term.

Avoid the common mistakes most women make about money, especially when they are in crisis- divorce, widowed, etc.  Schedule a free consultation with me at Calendly.com/contactagrace; or call me at 716-817-6425.

Adrienne Rothstein Grace, CDFA, CFP is a Certified Divorce Financial Analyst , author of
Going From We to Me: A Financial Guide to Divorce, and the founder of Transitioning Finances, a financial strategy firm that works with women who are thinking about, or going through, a financially complicated divorce. She also advises women who have lost a loved one, or experienced other financially challenging transitions. She can be reached at: Adrienne@AdrienneGrace.com.

Most people contemplate divorce for six months to a year before taking any action. They may limp through the holiday season, filled with family events and traditions, unwilling to confront difficult issues.  But when the holiday bills arrive and one more Valentine’s Day is a disappointment, February 15 can be the day to take action.  It can be one New Year’s resolution that you keep. It can be your way to protect your romantic heart’s future.

But who is going to protect your finances during this difficult transition?

Regardless of when someone decides to end their marriage, I advise them not to try to go thru the process without a Certified Divorce Financial Advisor (CDFA^TM) to protect their financial interests.

You go to a divorce lawyer for legal advice and strategy; your CDFA professional is the instrument to clarify the financial aspects of the strategy.  Your CDFA gets and analyzes the numbers, and helps you quantify your goals.  This makes it easier for your attorney to move forward with the legal process, and can speed a successful outcome.

Working with clients and their lawyers, a CDFA forecasts both the short and long-term effects of the proposed settlement, letting you know what the financial future may bring with Settlement A vs Settlement B, and gives your attorney the reports and tools they need to help settle your case.

So if your Valentine Day is the final disappointment, take heart.  A new start can lie ahead with all of your interests protected.

1.  Allow everyone to grieve and mourn the holidays of the past. Divorce is a kind of death: of unfulfilled expectations, or the family unit we used to be. Don’t try to pretend that the pain isn’t there.  Allow your kids to talk about the past, acknowledge it and move forward to now and how you’ll build your new future.
2. Be Thankful.  Focus on what you and your children have, rather than what you’ve lost.  Revenge is not sweet.  Keeping your thoughts positive will benefit everyone.
3. Watch your spending. More is not always better.  With budgets that may be tighter now, don’t dig yourself a hole that will be hard to climb out of in January.
4. Create New Memories.  Use this time to create memorable new experiences for both you and your children.  Do something different.  Make something together.  Create new ornaments, baked treats, table decorations; take lots of pictures of your new holiday creations.
5.  Try to avoid some of the usual rushing around, to allow for some quiet time.  Be thoughtful.  Think about what will support you and your kids best, during this time of transition.

As you well know, divorce is a long process. My therapist friends tell me it usually takes two years for people to ‘get over’ their divorce.  Sometimes it’s longer. The first holidays are hard but once you get past this one, it will get easier. Really!

Remember that putting “fun” into your life balance is key to a healthy life, healthy relationships, and a healthy outlook. It is as important to budget for fun as much as to budget for your healthcare or your child’s car.

“Fun” does not have to be expensive, but it has to be planned for in your budget at whatever level will give you balance. By planning for financial security with a sound budget, you can make these the best years of your life. A budget is simply an evergreen document that gives you a picture of your income and expenses, and helps prioritize both. It changes as your circumstances change.

If you’ve never had a budget, you’re not alone. More than half of Americans don’t use a budget regularly according to the National Foundation for Credit Counseling 2011 Consumer Financial Literacy Survey. As you enter your 40s, you’ve got important decisions and changes to make. In addition to your ordinary monthly expenses, your children may be about to go to college. Your parents may need additional care, and retirement is not very far away. No matter what stage of life you’re in, it’s never too late to begin managing your finances. 

Step 1. Get the big picture first. Determine whether you need a weekly, monthly or other time frame budget based on the regularity of your income and expenses. List all the money you get in a month, from your job or business, interest on your savings and investments and any other payments you receive. List all your expenses, including taxes, housing costs, transportation, food, insurance and health care, debt and utilities. Make allowances for irregular categories, such as entertainment and recreation, clothing and miscellaneous.

Step 2. First place to start: subtract your expenses from your income to evaluate your budget health. Decide what your expense priorities are and calculate the way to get there. Track your spending with the smallest of detail (too often we overlook seemingly insignificant expenditures that end up totaling more than we think). Look for opportunities to shave money off your expenses (bundling in-home entertainment and internet, shopping around for lower-cost service companies, etc.). Start to limit your use of credit to make purchases. Save more money. Consider charitable giving now or as planned giving in your will. 

Step 3. Prioritize the funding of your retirement by increasing your contributions. Place at least 10 percent of your income into retirement savings accounts and max out the contributions allowed through your employer. Talk with a financial advisor about your money needs for the future. Most Americans have an unrealistic idea of how much money they will need to live comfortably in retirement. Aim for about $1.5 million to $3 million in the bank so you don’t outlive your money.

Step 4. Review all your investing alternatives. Determine whether you’re being too conservative or on the other hand entertaining too much risk in consideration of your future financial priorities. Make necessary changes. Talk with a trusted professional help to find out if there’s a way to allow your money to grow — and last longer — without adding too much risk or instability to your investments.

Step 5. Focus on paying down your mortgage. Investment advisors agree that by the time you are in your 60’s your mortgage should be completely paid off. This is the first step in a comprehensive effort to reduce your overall debt load. Spend your 40s eliminating your entire debt burden so you can enjoy your later years.

Step 6. Analyze your insurance needs. Be sure you are budgeting appropriately to cover life, health and long-term care insurance needs. Plan your estate. No matter its size be sure to create a will, decide on power of attorney and set your medical directives. These are important adjuncts to your financial life at this stage. They ensure that all the hard work you’ve done in accumulating wealth doesn’t get intercepted as you progress toward ending your formal work life. They also ensure that your earnings and savings will benefit your loved ones.

Step 7. Budget for fun. Your 40s may seem all about responsibility; you work hard and care for your family. But you shouldn’t neglect yourself either. This stage of life offers an opportunity to pursue put-off passions with the stability you’ve built over time. Create room in your budget for travel, adventure, and that convertible you’ve always dreamed of. Now is the time to enjoy the fruits of your labor.

1. Is there anyone at all on whom you are at least partly financially dependent?
2. What would happen if that person was no longer able to deliver their end?
3. Are you prepared?

Well, contrary to popular belief, sometimes, life does give you a “do-over.” You might call me the women’s financial do-over. But the key to a “do-over,” is to do it over the right way. No matter what your lifestage, there are simple steps you need to follow to plan your financial future… over…

Let’s consider what women should be doing at various points in their life.

For those of you who are in your 20’s

• Remember the “save a penny for a rainy day” mantra, well start an emergency fund – you should have three to six months pay saved up in case you run into financial surprises. Surprises are.. after all… a surprise. But you can be prepared.
• I know you are not really thinking about retirement yet, but if your company offers a 401(k), sign up. Contribute at least the minimum percentage needed to qualify for the full employer match – you will get the most out of your employer benefits this way.
• Be financially prudent. Limit yourself to just one credit card, and pay the entire balance monthly. If you have an outstanding balance on credit cards, pay as much as you can as quickly as possible, starting with the highest interest card first
• Work on paying down any student loan debt
• And check your credit report to make sure there are no discrepancies – you would be surprised what can show up on your credit report that you are unaware of

For those of you in your 30’s

• Take a look at how your 401(k) or IRA money is being invested – a woman at your age may be able to afford more aggressive investments as you have many years before retirement
• If you’re buying a home, put 20% down to a void the cost of mortgage insurance. Your mortgage payment should be no more than 28% of your monthly income. These two benchmarks assure that you buy smartly
• Take out a disability income insurance policy if you don’t already have one, to protect you from the unexpected.
• Work with a lawyer to establish a will, and to address any other estate planning needs you may have. Working on your will is not only a way to address your estate planning, but will force you to answer some questions you don’t even realize are out there.

For those of you in your 40’s

• Review your life insurance policies to be sure you have the right amount of coverage and the right type as your needs may have changed. What we needed in our 30’s is not likely the same as what we need in our 40’s.
• Explore options for long term care insurance – buying young gives you more options for better coverage at better rates.
• Take a look at your 401(k) plan or IRA investments.  Your investment objectives may have changed as your life has undoubtedly changed.  Update your investments to better reflect your goals.
• Give your credit report another solid “once over” to be sure it reflects a true statement about your money management habits.

For those of you in your 50’s

• Revisit your retirement savings goal to make sure it still makes sense, and that you are on the right plan to reach that goal.
• If you are behind on savings, you can catch up by taking advantage of higher contribution limits in 401(k)s and IRAs.
• Review your estate plan to make sure it is up to date with changes in your life and current laws. Confirm you executors are the ones best suited to carry out your desires.

For those of you in your 60’s

• Consider your retirement income strategy. Determine whether you can live off of a small percentage of your retirement assets and continue investing the majority.
• If you earned a traditional pension, compare the payout options and make sure your choice doesn’t exclude you from other retiree benefits.
• Find out when you can receive your full Social Security benefit – you may want to hold off on collecting your benefit up to age 70 to increase your monthly payout.
• Get yourself ready to enjoy your upcoming retirement in every way, not just financially.

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.