Separate all spousal property and accounts immediately.
The new year is a popular time for couples to get divorced, as many people want to start the year with a clean slate.
Divorce is never easy, and messy finances and intertwined spousal property and accounts makes it even harder. In their new book, “The Optimist’s Guide to Divorce: How to Get Through Your Breakup and Create a New Life You Love,” (published by Workman Publishing Company) freelance journalist Suzanne Riss and real estate agent Jill Sockwell walk soon-to-be and newly divorced people through the tough aspects of divorce, including managing emotions with serious matters, jump-starting a career and building strong relationships with friends and family. The two also founded the Maplewood Divorce Club, a New Jersey-based divorcees’ group.
Here’s what you can do to ease the pain of divorcehood:
MarketWatch: What are the first potential issues women face when they prepare to get divorced, are in the middle of a divorce, or right after they sign the papers?
Suzanne Riss: It’s not just emotionally challenging but there are financial challenges as well. On average, divorce costs $20,000 and that includes legal fees and tax consequences. It is important to go in with your eyes open, whether you’re thinking about it or taking steps to file for divorce. We recommend taking a look at your budget, how you’re going to earn a living or what expenses you will be incurring. Or maybe you’ll be going back to work.
Jill Sockwell: If you are separated, and if you’re asking a spouse for child support or alimony, you don’t have to wait for the divorce to get payments from him. You can ask a lawyer for a consent law order until it is finalized.
MarketWatch: What are some other steps soon-to-be divorcees should take for their money?
Riss: Among the first steps to safeguard your finances is to separate them as soon as possible so you’re not responsible for your soon-to-be ex’s debt and spending. We also recommend people putting alerts on their accounts, sometimes out of fear or panic one might withdraw a huge amount of money. Get a new cellphone plan. You might need privacy and independence.
You also need to think about health insurance, especially if you have kids. If you are on a spouse’s health insurance plans, you need to decide whether you’re going to negotiate to stay on the plan or get new health insurance. Also take a look at if you have enough savings to get you through a couple of months, and if you don’t, ask for a loan from a family member or close friend, because there are some unavoidable first expenses when starting out.
Sockwell: Make a list of all of the bank accounts, all of the retirement accounts, all of those things that have value because sooner or later your attorney will ask you for those. Budget your monthly expenses. It will help you predict what monthly income you’ll need.
If you are staying in a marital home, can you cover the mortgage? If you have a car, that includes insurance. There’s food, transportation to and from work. Kids aren’t just clothing but sports and activities. Your settlement agreement should be pretty detailed, including, ‘What does child support cover?’ so that it is not up for disagreement later on.
MarketWatch: What are some misconceptions of divorce?
Sockwell: One misconception is that the court cares if he cheated and you’ll get a bigger settlement. It varies state by state. Another: if the divorcee stayed home with kids then they get to continue to be stay-at-home. It is next to impossible to take one income and split it over two houses and maintain the same standard of living. Often times, women out of the workforce will get rehabilitative [short-term] alimony, so they can rejoin the workforce or go back to full-time if they were part-time.
Women have only half the retirement savings of men, even though they control $5 trillion in investable assets. Can Wall Street get women to invest more?
Riss: More women are financially independent and earning an income, so we also heard from a lot of women that they were surprised they were the ones paying alimony to their ex-husbands who either didn’t earn as much or worked sporadically, so now there’s a rise of women who are paying alimony and seeing their paychecks stretch between two homes instead of one.
MarketWatch: Divorce is emotional — how can women proceed when they also have to deal with finances?
Riss: We encourage women to seek out others who can show them the way because this is a time people isolate themselves because they are embarrassed, confused or may be depressed or anxious. This is a time to make the effort to separate emotional from practical. These decisions can impact you for years to come.
MarketWatch: You mention in your book jump-starting new jobs after divorce — what can they do?
Riss: We had women tell us about careers you can start in six months or less, things you never heard of like phlebotomist, who draws blood from patients for medical tests. They come with a limited number of hours of training and the jobs are plentiful. There are others like medical interpreter and paralegal, or certified nurses’ assistant.
(This interview was edited for clarity and space.)