All good divorce advice will acknowledge that there are many parts to breaking up. Breaking up legally, physically, emotionally, and financially are to name a few.
As financial experts who work with women, we know that women in particular must recognize that all these parts come into play when divorcing, and at the same time, women must strive to separate them. This is especially true when it comes to money. You must aim to separate your emotions from your decisions. In fact, you must treat the financial part of your divorce as a business transaction.
This is hard to do. A lot of women have anxiety about money precisely because they have an emotional relationship with it. So our first piece of divorce advice is find support (a coach or therapist who specializes in divorce) to help you learn about your emotions and how they impact your decisions. A professional can help you learn how to understand, harness and also compartmentalize these emotions. Again, this is particularly important when it comes to money. Our second piece of divorce advice is to work with a financial expert who will take the time to educate you on what your real financial choices are so five years from now you are in your best financial place.
The key to managing your money throughout your divorce negotiations, and more importantly, the long term, is to keep your emotions in check as best as possible and focus on looking at your financial FUTURE. A forward-looking focus gives women the greatest chance at getting the best possible divorce settlement. And her best financial settlement will usually avoid spending a lot of money on attorneys and going through a lengthy court process.
You must aim to separate your emotions from your decisions. In fact, you must treat the financial part of your divorce as a business transaction.
One of our clients felt a lot of anger at her husband when he decided to move out. This ratcheted up further when he did not always live up to his custody obligations, leaving her in a lurch and disappointing their 8-year-old twins. Although their relationship was strained, the couple agreed to try the collaborative divorce process, which was an excellent and cost effective way to for them to divorce, but which requires good communication.
Our client worked hard at keeping her emotions in check and the yelling to a minimum. Whenever she needed to speak to her husband about issues, she held her tongue and remained civil. When they hit a tough negotiating bump, trying to work out the amount of child support she would receive and who would pay for the twins’ educational expenses, her relationship with her husband was stable enough so that she called him directly and had a productive conversation.
Our client often shared with us (and her therapist) how difficult and painful each and every interaction with her husband was and how hard it was to keep her emotions in check. Due in large part to her self-control, the negotiations moved along quickly and her financial settlement was equitable. He ended up agreeing to pay a bit more monthly alimony and child support than the guidelines indicated. In addition, he gave her a little more of the joint cash than she expected.
Now six months post-divorce, she has a smile a mile wide. The anger and injustice that dominated her thoughts during the process seem like a distant memory, and she relishes the feeling of financial security that comes with winding up with enough money to live a reasonable lifestyle.
Contrast this experience with that of another client. She and her husband had a second home in Connecticut where the family spent their summers, and it held special memories for our client. When the couple separated, her husband made the Connecticut home his main base, and soon after his girlfriend moved in. He wanted to buy our client out of her half of the house as part of the settlement. He offered her 10 percent over the market value to move the process along. Angry at him for living there with another woman in seeming bliss, she demanded that the house be sold. She admitted to us that the house had become tainted in her eyes and she would never want to step foot in it again, but was determined that he should not get to live there. We showed her that financially it made no difference whether she received half the value of the house from him as part of the settlement, or half the value of the house when it was sold. Unable to let go of her demand despite recognizing the financial reality, she spent the next nine months and tens of thousands of dollars only to have a judge ultimately rule that he could keep the house and pay her half.
The outcome of financial negotiations will dictate what lifestyle a woman will be able to live for years after the divorce. The importance of obtaining the best reasonable financial settlement cannot be emphasized enough. To achieve a good financial outcome requires a cool head.
Writers, Ellie Lipschitz and Dorian Brown are Certified Divorce Financial Analysts (CDFA’s). Their specialty is working with women on the business side of their divorce. As CDFA’s, they educate and assist their clients to understand the financial aspects of their divorce so they can confidently negotiate an optimal settlement.