No one says “I do” with the expectation that one day they’ll be signing divorce papers. Regardless of how it happens, it can be shocking for any woman to experience the transition into becoming suddenly single. And for many women, divorce or widowhood presents many challenges, both emotionally and financially. The truth is, divorce affects everything from where you live and the time you spend with your children to your income and long-term financial health. That is why you should consider financial planning you are mid-divorce.
Managing your money during a crisis like divorce can be overwhelming; however, there are ways to help you keep your finances on track. At Calamita Wealth Management, our goal is to help women navigate their new season of life. Here is just one example of many.
Our Financial Planning Mid-Divorce Process
Our typical clients in this phase of a divorce are women in their mid to late 50s who often still have high school-age or college-age children. They have usually been married for 20-plus years and need help understanding what they have in terms of assets and liabilities. They also need help putting together a spending plan for post-divorce life.
This process often involves projections of what assets could be received in the divorce settlement as well as discussions around keeping or selling the house. We take time to thoroughly educate our clients so that they feel more confident and well-informed about their decisions. We cover five broad planning areas: cash flow, assets and debt, insurance, taxes, and estate planning.
How We Helped
In Vivian’s1 case, she needed help setting up a budget and getting an inventory of her assets. During her 25-year marriage, her husband took care of all the finances. She wasn’t used to tracking her spending on a monthly basis and wasn’t sure where to start when it came to understanding how much money she would need as a single person. We were able to help Vivian in three steps:
- Expense worksheet. The first step in helping Vivian get clarity around her budget was to go through our expense worksheet line by line. We categorized her spending into six main areas using ballpark figures to avoid adding undue stress and confusion. Then we used her mortgage, credit card, and bank statements to fill in the remaining gaps.
- Project spending. With this information in hand, we were able to project what her spending would be as a single person post-divorce. It turned out to be roughly $8,500 a month excluding any mortgage payment.
- Retirement savings. The next step was to estimate how long Vivian’s money would last during retirement. We found that she had to make a slight adjustment to her spending in order to have some extra cushion for her later years. Once we explained the pros and cons of this decision, Vivian was very willing to cut back on a few areas of her budget.
With our guidance, Vivian was able to enter the divorce settlement feeling more informed and at peace. She was empowered to make decisions she could be proud of, even though it wasn’t everything she initially wanted. For instance, our expense exercise gave her the information and confidence she needed to request that her auto loan and mortgage be paid off prior to splitting the estate. This helped reduce Vivian’s monthly expenses and allowed her to save more toward retirement.
Don’t Go Through Divorce Alone
At Calamita Wealth Management, we specialize in walking women through the intricacies of divorce so this life transition won’t derail your finances. We are here to help with financial planning mid-divorce. To see what a difference the dedicated support of Todd, Catherine, and Britton can make in your situation, schedule an introductory phone call using our online calendar or reach out to us at (704) 276-7325 or email@example.com.
Todd Calamita is the founder and managing principal of Calamita Wealth Management. This is an independent, fee-only wealth management company located in Charlotte, NC. Calamita Wealth serves people locally and across the country, that focuses on providing wealth management solutions to affluent individuals over age 50 and their families. He has more than 20 years of experience in the financial services industry and is passionate about helping people have a better life. He does this by designing and implementing customized financial plans that bring clarity and confidence.
Todd is a CERTIFIED FINANCIAL PLANNER™ and CERTIFIED DIVORCE FINANCIAL ANALYST® professional. His educational background includes a Bachelor of Business Administration from Ohio University. He also received a Master of Business Administration from the Weatherhead School of Management at Case Western Reserve University. Aside from planning, he authored, Plan Smart: Conquering 10 Common Money Traps, as well as numerous articles on wide-ranging personal finance topics, from taxes to retirement accounts. He featured in a Financial Boot Camp TV series as a volunteer showing people how to make smart decisions with their money. When he’s not working, you can find Todd spending time with his wife, Teresa, and their two sons, Colin and Cameron. He enjoys rock climbing, swimming, and traveling. Todd even has a black belt in Tang Soo Do, a Korean martial art. To learn more about Todd, connect with him on LinkedIn.
1 Name changed for confidentiality