Things I Wish I'd Known Regarding Finances
How much do you really know about your finances?
Do you have a clear understanding of how much money you have in the bank? What your investment portfolio consists of? What retirement accounts you have and how much is in each?
Do you know what your monthly expenses are? Not just the fixed monthly bills like rent or mortgage, and utilities, water, phone and cable... but how much cash goes out each month in detail? Do you have debt? And if so, do you have the most efficient plan to pay it off?
If you answered "no"... you are not alone. So many of us too easily release the financial reigns to our spouses or partners.
It's not unusual for one party to take control over the finances. You may know what you're bringing to the table for income, but you also need to know where the money is going when it goes out, where it's invested, and how much of it is saved. Your personal financial literacy enables you to make informed decisions, and know your money is being managed intelligently, ensuring that will have enough to get you through your life and any unexpected expense without worry.
When it comes to divorce, understanding your finances is exponentially more important. As the saying goes, "Knowledge is Power." Being able to approach the negotiating table with a firm grasp on your finances give you confidence and control. Take the time to consider your expenses post-divorce so you have the comfort of knowing what you need in your next chapter. When you know precisely what you're working with the fear subsides and you know when you can compromise and when you need to hold firm-- YOU are driving the conversation. You'll be able to make on the spot decisions, and the whole process can run smoother, quicker and ultimately more cost efficiently. You will leave negotiations knowing you made the best possible decisions for you and your children, and start your new life off feeling good - without the stress that comes with uncertainty. Scott Coopersmith, CDFA®, CLU®, and founder of SDA Divorce Solutions emphasized, "It's imperative to be organized and live on a budget. Always track your expenses" he said. "You need to know what you have and what you spend on."
A friend and I were recently talking about divorce, "I wish I hadn't buried my head in the sand during my marriage and was more informed with respect to our financial status, information regarding accounts, investments, etc.," she told me. " I would've done some more investigating on my ex's accounts, had a better sense - and documented - what we had, where the accounts were, and how much was in them."
This, from a friend, whose ex was very responsible and transparent with money - now imagine how you might feel if you suspect your ex is mismanaging or hiding money? It's no secret that divorces can get ugly, and that money is one of the biggest points of contention in a divorce. Don't you want to arm yourself with as much knowledge as possible? Learn as much as you can about your money. Facts are indisputable. Money leaves a trail. Understanding that trail may be the key to enduring and exiting your divorce feeling good, feeling confident, feeling ready for your new, independent life.