My favorite thing in life is to work with women to reset and redesign their life after divorce, which naturally includes finances. No worries not only am I psychotherapist but I am also a financial therapist with a degree in business. Today I want to share with you my own financial divorce trauma with my own secret tips to getting back in control of your finances.
Last June I took my daughter on a short trip to Universal Studios for a red carpet event, this was our first trip to the theme park. We are Harry Potter obsessed so I was delighted to be invited to this event. At the time I was separated from my then husband and had been for over a year. I had just started my own counseling practice a few months before but still owned a real estate company and partial ownership and was CEO of my husband’s practice. While my practice was not bringing in a profit I was still making an income from the other businesses. While on the trip I noticed that my direct deposit transfer never happened but I did not think much of it. During my event, my husband texted me to tell me that he drained all of the accounts and moved all of the money to a new account he opened and I would no longer have access to any of the businesses. At this point, he probably transferred about $20,000 and turned off all of our joint credit cards. This really put me in a bind, I tried not to let my daughter know, but it legit ruined my trip. Fortunately, I had a credit card that was just in my name that I could use for our expenses on the trip.
In April I know the divorce was imminent and had been saving everything I could but at tax time I found that my husband had not saved enough to pay our tax bill which I then had to contribute all of my savings aka my divorce fund. The IRS does not care about my money and his money just that we filled jointly and now both owed this amount of money. Fast forward to June and not only did I lose my entire savings but now I no longer had access to any of our joint money or access to any of my business proceeds.
Of course, when I returned home I consulted with a lawyer, a very expensive lawyer. I did not walk away with much hope after the meeting, and honestly, I couldn’t afford to retain his services either. He ensured that he would file a financial restraining order but at this point, I couldn’t even scrounge up the money to pay his retaining fee. I won’t walk you through my entire divorce battle but needless to say, I didn’t walk away with near what I would have liked to and had to sign both of my businesses over. I did walk away with an opportunity for a new start and a clear conscience and that was worth everything.
Here are my tips to financial recovery:
1. Pull Your Credit Immediately: Pull You credit right after your divorce and if you are working on increasing your score pull it at least every 3 months. If you have the ability to get a credit card see if there is one that has free credit reports. With my capital one card, I am able to see my score updated every month and make adjustments as needed to rebuild my credit.
2. Start a spending plan: Knowledge is power and you absolutely need to know how much you are earning and how much you are spending. I personally don’t like zero budgeting because I need flexibility, find something that works for you.
3. Do not count child support or alimony: Nearly 60% of child support accounts have arrears. Most people do not receive the full amount they are entitled to. Do not depend on this money, it truly isn’t yours until it is sitting in your bank account. And let’s be honest the system is not set up to continue to track down your money, whether it’s child support, alimony, or your divorce settlement. If you are receiving it….yes! that is great, count that money as a bonus but never count that money into your budget as if it is guaranteed.
4. Adjust your lifestyle: I see this all of the time. Women want to hold on the lifestyle they are used to or to prevent any changes from rocking the boat at the homefront. I get not wanting for anything to change for the kids or for you. But it’s time to make an adjustment, there may be a reduction in vacations, hobbies, and convenience items but it’s better than crying at night because you are hemorrhaging money.
Were you financially traumatized during your divorce? Connect with me if you have by leaving a comment or emailing me. Do you have financial tips to share because we would love to hear them?
If you’re looking for a support club to help you reset and rebuild after a divorce I invite you to join us at www.jesscline.com/membership where we all come together to redesign our lives in all aspects including finances.
4 Secret Tips To Makeover Your Money After Divorce
May 6, 2019