Keeping Your Financial Head During a Divorce
If you and your spouse are
considering a divorce, chances are you want the settlement to go as
smoothly as possible. No one wants an endless back and forth about who gets
what. As a result, I've seen people settle things in a manner they knew was
unfair because they were weakened by the trauma of divorce and didn't have
the fight in them to get what they deserved. It's a mistake. When you're
splitting your assets is not the time to roll over for the sake of
Before you go ahead with divorce proceedings, ask yourself some
important questions. Talk to a professional if you have to, just to learn
about your own assets. If you are embarrassed that you don't know more
about the finances, get past it. Again, this is not the time to worry about
how you will be perceived by others.
Know your financial situation. Some people are wizards at managing
the family's month budget, but do not bother dealing with investments,
retirement, and other savings account type finances. There is no shame in
that, but now is the time to learn. An attorney can help you learn:
much is in your 401(k) accounts?
there a pension for you or your spouse? If so, how much is it?
there any investment accounts?
is your credit rating? (You can order your credit report fairly simply
on the Internet.)
kind of insurance do you have?
To protect yourself, remember to learn these
details not only about your finances, but also about your spouse's.
Get to know the details of your mortgage. If all you know is the
amount of your mortgage payment, you have a new more things to learn. At
the very least, understand the basics of mortgage: principle, interest,
equity, down payment. Here are some other questions to ask.
are the details of your home ownership?
name(s) is(are) listed on the deed?
bank holds your mortgage?
much do you owe on the home? How much equity do you have?
What do you want to do with the family home?
This is perhaps the most difficult question
to answer when a family is divorcing. Consider the following:
the house assessed so you have a dollar amount attached to your
Your house will not pay your bills. If it seems too much of a
financial stretch, perhaps it is.
you have children, is it important for you and your spouse to keep the
home so that their lives are impacted as little as possible?
that mortgage companies are not bound by divorce decrees. If both of
your names are on the deed and someone stops making payments, the
mortgage company will hold you both responsible - whether you live in
the house or not.
Whatever you and your spouse have decided
upon for a settlement, make sure and get some professional advice. You
may trust your lawyer, but only a financial planner can know the details of
what is at stake and how it can be divided fairly. For example, you may get
all the equity in the house while your spouse can keep the 401(k). An
accountant can advise you on the full tax ramifications of your decision.
Turning one household into two households with the same income is bound to
lower the quality of life for both you and your spouse. Perhaps this
knowledge is the final push you need to give therapy one last try.
Debbie in The Boston Globe
I just had to respond to an
Op-Ed piece I saw this month in The Boston Globe called
Mortgage brokers' sleight of hand and was thrilled that The
Globe chose to publish my Letter to the Editor.
Click here to
read the letter!
October's Home Value Improver
Fix Up Your Family Room
Enjoy a more spacious and organized family room!
Do you long for a bigger, more attractive family room? You may have one
already, it's just a little cluttered and tired since it has been used so
much over the years.
You all remember the Fleetwood Mac song If you can't be with the one
you love, love the one you're with. Think of this song while you're
making some changes to update your family room and make it a better space
to be. Love the family room you have!
Declutter. Take everything out of the room that you
don't need. Even if you love that old family picture, take it out for now
and see what you think. You may prefer a clear table to one with a picture
of you in that 80s hairstyle, anyway.
Organize. Think about what you and your family like
to do in the playroom. Do you listen to music a lot? Watch a lot of TV?
Play games? Organize the family room around those activities. An
entertainment center, or a group of built-in shelving can hold lots of
Add some splashes of color. If buying new furniture is out of your budget, try
reupholstering the couch, or adding some new colorful pillows. Some new art
for the wall will also spruce things up
Improve from the ground up. You may have become so used to that old rug that you don't
even realize it's bringing the whole room down. Get some fresh flooring,
whether it's wall-to-wall carpet, throw rugs, hardwood or even tile.
Remember when you're decorating that
groupings of three are most pleasing to the eye. So when decorating, thing
of putting things with three - for example, a picture, a table, and a
No family room? Create one! You may be able to create one with a garage bay. Cover up the
walls with some wallboard and install a heating source, and you're on your
way to a family room. Replace the big garage doors with French doors, and
here to share this newsletter with a friend
I was pleased to be asked recently to join the Women's Life
Planning Network. It's a newly formed group of financial professionals who
are committed to provide exceptional financial education and solutions to
address every stage of a woman's life. One of the stages that many women go
through, often unexpectedly, is divorce.
Men and women suffer during a divorce. But women are far more likely than
men to suffer financially when their marriage ends. The National Marriage
Project at Rutgers University revealed that a woman's standard of living
will drop by as much as 27% -- compared to 10% for men -- after a divorce.
The family home is huge part of most divorce proceedings, and I am always
happy to help couples figure out their options in what can be a very
challenging situation. For more information, read this month's feature
Please feel free to call or email anytime with your mortgage question!
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This month's column: Changes in Interest Rate Affects Your Bottom