3 things I wish I could tell every divorced woman about money as a CFP
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If you’re a woman and you’ve been through a divorce, believe me, I know what you’re going through. I am not divorced myself, but I am the child of divorced parents, and this experience has taught me a lot.
In fact, I would dare say that this pivotal event in my life motivated me to become a Certified Financial Planner and a Certified Divorce Financial Analyst, as well as earn my postgraduate degree in Family Therapy.
There are many reasons why you could have divorced. We are not here to look at the past but to focus on your bright future, in which you will conquer your finances.
Here’s what every divorced woman should know about money.
Create a budget
With divorce comes the enormous challenge of reconfiguring your life. Now, what you and your partner used to do together, you have to do yourself, from the big things like contributing financially to the household income to the little things like filling up your car with gas at night. . Moreover, you live in a world where women earn, on average, 79 cents for every dollar earned by a man for the same job.
After a divorce, women have to be thin and mean, mustering extra power to adjust their finances to their new life. How do you do that, you ask? With great discipline and an intimate relationship with your new spending plan (aka your budget) – it’s your new best friend.
Start by detoxifying all the expenses that don’t make you 100% happy and unnecessary. In addition, link your finances to an app, such as Mint or You Need a Budget, which can track your spending against your budget. Keep the difference between your expenses and your income in a high-yield savings account.
A word of warning: be careful not to overcompensate by shopping or trying to buy your way to happiness; it’s common to spend more or eat more when you’re feeling emotional. Instead, fill your day with financial affirmations,
social impact and exercise that will clear your mind and lead you to a positive life of prosperity.
Know the value of your time and delegate tasks that aren’t worth it
Every divorced woman should fully understand the value of her time. For example, if you work 60 hours a week in a full-time job with pay (or run a business) and earn X dollars, divide the dollars by the hours to calculate what you earn per hour.
This amount will help you decide if the one-hour phone call to the cable company or the two-hour shopping spree at the supermarket is compatible with achieving your financial goals – consider delegating or grouping tasks or ordering online when you can.
Build an emergency fund and protect yourself
It used to be that you might have relied on your spouse in times of financial emergency. Now you should have three to six months of fixed expenses saved to weather any storm that may come your way.
Also be sure to protect all your assets with insurance – you will need to cover your car, home and health, and you may want to purchase life insurance (if you don’t already have it) as well as disability insurance in the event of a medical problem preventing you from working. You can’t afford to lose your hard-earned money, and insurance is a good strategy to reduce your out-of-pocket costs in the event of an accident.
You should update your estate planning documents, too. This includes your health care directive, enduring power of attorney, guardianships, and insurance beneficiaries.
Finally, it’s a good idea to focus on your long-term finances by invest your money so that it grows. After all, women live an average of 10 years longer than men, so make sure your money will last by investing.
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Recognized as People magazine’s 25 Most Powerful Women of 2017, Elaine King is a family business counselor and certified professional financial planner who is considered an international family financial planning expert and an ambassador for the CFP Board of Standards. She is also the founder of the Institute of Family and Moneywhose mission is to strengthen the human and financial capital of the family by making money a positive force.