Divorce and the House

 

I kept the house after my divorce.  I receive alimony/support until my three children all turn 18, in five years.  Approximately a little more than half of my support goes to my mortgage and home living expenses. Once my support ends I can no longer afford to live in my home. In the meantime, does it make sense that a large chunk of my support goes to maintaining my home and just making ends meet each month? Real estate is expensive where I live so I have limited options. I am not sure if should continue to hang onto my home and not save any money each month or sell before my support comes to an end.

 

The primary objective is to “Create Margin” in your life. In this case, we are referring to how much financial margin you need now and for the future. Your first step in finding out what that looks like is to talk with a financial planner.  A thorough review of a comprehensive plan for the future is the key to success here… Anything less will simply not work.  Once you have this knowledge and information you will understand the changes/choices that are necessary for you to survive. No… THRIVE!

 

It’s obvious that you already see the writing on the wall… Divorce will require intentional, dedicated, and focused decision making. Some (or many…) of them will be sacrificial. Life and the finances are different now. Face it HEAD ON! From my perspective on your situation – Build cash reserves now and if you are not in the work force… build your resume and get in today!

 

I would recommend that you get an appraisal on your current residence to establish a payout/baseline. Then take a look at the marker that you would “downsize” into.  You might even enjoy renting, as the landlord will be responsible for the burdening repairs and maintenance on the property.

 

Bottom line— Get educated by a professional, stay focused and encouraged with your plan, and enjoy finding ways to “Create Margin” in all the areas of your wonderful life!

Best wishes to you and your family!

 

 

©2017 Divorce911.com. All Rights Reserved |This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Post-Divorce

DIVORCE 911 Collaborated with Wendy Hayes of Mitchell Hayes for this blog.

We also have a video covering this topic.

 

In many cases, people will return years after their divorce for some kind of modification. That could be property that wasn’t properly titled when the division of assets was supposed to happen, or worse yet… the division of debt. Perhaps one party is responsible for paying off debt and did not do it.  Then the bank or whoever the lender on the debt comes after the other spouse. If you haven’t taken the appropriate steps to have your name removed off of that debt the lender has every right to come after you to pay it.  They are not required to administer or respect your divorce.

This is why it’s so imperative to think forward and think about what is going to happen post divorce. You want to do everything you can to minimize the possibility that you have to go back and seek a modification in the future. It can be extremely costly to be able to do so, it’s very difficult, and it’s emotionally draining.

Once again, that is why it is so important to think through all of what can happen once you get that settlement. Make sure everything gets titled correctly post divorce. This prevents the ability to come back later and ask for more money.  When it comes to child support, remember that your child’s expenses increase over time.  Thinking far enough in advance so that your settlement has your future protected should keep you from going back to court and asking for an increase.

The biggest thing to remember to do is to think forward. Really get out of your past, separate yourselves from the now, think forward to what your future is going to look like.

 

 

This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Your Financial Plan is Wrong and That’s OK

This blog is Courtesy of Russ Thornton of Wealthcare for Women.

 

If you have a financial plan, at this very moment in time, it’s probably wrong.

Think of it like you’re an airline pilot.

If you’re responsible for flying your plane from Atlanta to Salt Lake City, during the course of the four-hour flight, you’ll likely be off course most of the time.

Just consider all the variables that can impact the plane and its flight path at any given moment.

However, through a series of small, ongoing adjustments to offset the impact of turbulence, headwinds, storms and more, the pilot (along with a lot of avionics) is there to make sure the flight arrives safely at its destination on schedule.

Similarly, I would argue that your financial plan is “off course” most of the time.

Again, think of all the variables that impact your financial life and your financial plan.

Things like:

  • Health issues
  • Loss of a job
  • Need to care for family members
  • Death
  • Divorce
  • Tax legislation
  • Unexpected expenses
  • And more

These are just like the turbulence, headwinds, and storms that a pilot needs to negotiate when flying a plane.

Add the uncertainty of the investment markets to the mix, and it’s easy to see how it’s unrealistic to expect your “financial flight plan” to be on course every moment of every day.

Here’s a quick financial example:

You recently welcomed a new granddaughter into the world. And let’s say you want to help her parents by paying for half of her undergraduate degree.

According to the College Board, the national average costs for an in-state public school during the 2016-2017 academic year is $24,610. For a private college, these costs averaged $49,320.

Let’s say that just a few weeks after the birth of your granddaughter, she gets her Social Security number and you set up a 529 savings account for your contributions to her future tuition.

She’s just a few weeks old. Will she go to public college? Private college? In state? Out of state? Will she get financial aid? Merit awards? An athletic scholarship?

Will she go to college at all?

Maybe as a starting point, you use the average of the public in-state and private schools to get an annual cost of $36,965. As you’ve committed to covering half of this cost, you need to save for four years of college at $18,482 per year (in today’s dollars).

You come up with a savings plan to save some money into her 529 account each month.

But after doing this diligently for 15 years and staying on track to reach your target college savings goal, it becomes obvious that your granddaughter is on a different path. She’s been cruising through her AP classes, is involved in 2-3 extracurricular activities and wants to become a neurosurgeon.

She wants to go to Duke for her undergrad pre-med program.

Tuition at Duke is $49,241 per year. And total annual costs to attend Duke average over $66,000 per year.

Quite a bit higher than you originally planned for.

How you respond to this new information isn’t the point of this article.

The point is that things will change. You’ll get new information. You’ll have to make adjustments and course corrections.

And this was just an example of helping with your granddaughter’s college.

Add other education savings, retirement, long-term care insurance, travel goals and other needs, wants and wishes to your plan and it’s pretty clear just how easy it is for your plan to be off-course as much or more than it’s on-course.

But even if your financial plan is wrong at this very moment, that’s perfectly fine.

Your financial plan isn’t the answer to a formula or a one-way ticket to a comfortable and confident financial future.

Your financial plan is simply a snapshot in time that reflects everything we know at this moment.

Your plan is actually a guide to help keep you headed in the right direction. So you’ll reach your financial goals safely and on time.

But a key ingredient in successful financial planning is having a system in place to make regular evaluations and adjustments along the way.

And with your financial plan, there’s no such thing as autopilot. Or set it and forget it.

That’s why financial planning (verb) is more important than simply having a financial plan (noun).

Your financial planning process needs to be flexible so as you encounter new information or you’re faced with new decisions or life transitions, your financial plan can easily accommodate this new data and serve as a personalized decision-making tool.

Perhaps at this point, if you accept my premise that your financial plan is wrong most of the time, you’re wondering if it’s even worth the effort.

I mean, why bother with financial planning in the first place?

While I’m clearly biased, I think financial planning is one of the most important things you can do for yourself and your family. And this transcends matters dealing solely with money.

Financial planning is a valuable process through which you can better clarify your values, your goals, and your priorities. That alone is worth the effort if you ask me.

But having a living, breathing financial decision-making framework that you can rely on as you encounter life’s headwinds and storms can also deliver peace of mind and reduce your anxiety when faced with a decision.

Especially for a choice, you didn’t see coming.

So think of your financial plan much like a flight plan.

I doubt you would feel comfortable getting on a plane if the pilot didn’t have a flight plan.

Why should your financial future be any different?

 

 

©2016 Divorce911.com. All Rights Reserved |This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Don’t Let Your Finances Get Blown Away

This blog is courtesy of Russ Thornton of Wealthcare for Women.

 

There I was, standing in my driveway on a beautiful Sunday afternoon, unleashing a stream of expletives.

Just 2 weeks prior, I went outside to use my backpack leaf blower.

And it wouldn’t start.

And while I’m no small engine expert, I pulled out the spark plug and cleaned it off and ran a few more tests to see if I could get it to fire up.

No matter what I tried, nothing.

So after borrowing my neighbor’s blower, I took mine around the corner to the “helpful hardware folks” at Ace Hardware.

They kept it a few days and called me to say it was starting up just fine now.

I went to pick it up and spoke to their leaf blower guy. He said he couldn’t pinpoint the issue, but he emptied the fuel reservoir and put some TrueFuel in it. He yanked on the starter cord with me standing right next to him and it fired right up.

And then about 2 weeks, later, on a Sunday afternoon it wouldn’t crank at all.

That’s why I was cursing.

So I throw the blower in the back of my SUV and take it back to Ace. Thankfully their leaf blower guy is there and we take it outside for him to give it a quick inspection.

He tries to crank it with no luck.

He replaces the spark plug. No luck.

He “thinks” it’s the ignition module acting up. But he’ll have to tear it down and figure it out. He’ll call me when he knows more.

Hopefully, I’ll be back in leaf blowing action soon.

And just so you know, here’s a satellite image of my home, courtesy of Google Maps. We’re completely tree-covered, so while a working leaf blower isn’t a necessity in the Spring or Summer, it sees a lot of action in the Fall and into the Winter where I’m sometimes blowing leaves 2 and 3 times a week.

I share all this with you to ask you this:

How do you know when it’s time to be patient and stick with your financial plan or when it’s time to try something new?

My blower wasn’t working. I took it to get fixed.

It’s still not working. I took it to get fixed. Again.

There’s some trial-and-error going on here in an effort to first diagnose and then prescribe a solution so my leaf blower will work again.

Being patient and continuing to try to start it myself likely would have ended in a lot of frustration and no small amount of obscenities being uttered. And it almost certainly wouldn’t have started.

It was time to try something different. And get some help.

I often see some parallels with this concept and your financial planning.

How do you know when it’s time to simply be patient and give your financial plan time to work versus giving up and trying something new?

In my experience, if you’re working with a trustworthy, fiduciary financial advisor, it often makes sense to be patient and give it more time.

Financial planning isn’t a sprint. It’s not even a marathon.

It’s more like one of those obstacle course races you might have seen, but instead of it lasting a few hours, it lasts the rest of your life.

Yet, so many people are quick to dismiss something that they feel isn’t working only to go try something different.

And whether something different is a new DIY approach or hiring a new financial advisor, they often end up doing essentially the same things over and over again.

This is reminiscent of the definition of insanity.

So should you judge the progress of your financial planning over weeks, months or years?

Is financial planning progress defined as beating the market? Achieving your goals? Reaching financial independence?

While I have some opinions about these matters, the truth is that your definition of financial planning progress and even financial success is unique to you.

Everyone’s financial plan is different.

If your financial plan isn’t unique to you, then you don’t have a financial plan.

You may have an investment plan that’s similar to someone else, but it’s not a personal financial plan without the “personal” part.

So while you may often be tempted to throw in the towel with your current financial plan or financial advisor relationship, I would encourage you to stick with it. It certainly can’t hurt to get a 2nd opinion from another qualified advisor, but as I’ve said many times before, often the best advice is,

“Don’t just do something, stand there.”

Otherwise, if you allow yourself to be blown from one idea or strategy or advisor or plan to the next, your finances might get blown away too.

And that’s the exact opposite of what financial planning is all about.

©2016 Divorce911.com. All Rights Reserved |This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Child Support

DIVORCE 911 collaborated with Steve Shewmaker of Shewmaker & Shewmaker for this blog.

We also have a video covering this topic.

 

There is a common misconception of how you would pay child support. Let’s suppose that your children are going to live with your ex-spouse or perhaps someone you were never married to but have children with. The common misconception is that you would pay this ex a straight percentage 23% of your income for one child or 33% of your income for two children. That was the model that Georgia and many states followed.  Some states still follow that model. Georgia moved away from that model several years ago and has joined the majority of states using a new model.  This new model is called income sharing.

The way income sharing works is that both parents gross monthly incomes are added together to get a total monthly income. This again is the gross income, before taxes. That total and the number of children are the factors for child support. There is a table in the law under the official code of Georgia 19-6-15. This table will tell you on the combined gross income of the parents and the number of children how much child support is required for the child.

Say for example it’s $1,000 a month in this table. That’s not the end of the story. You wouldn’t necessarily pay $1,000 dollars a month. The next thing we would consider between you and your ex-spouse is what your pro rata percentage of that income is to the total. Say yours is 40% and the other spouse’s amount is 60%. In that case, you would be 40% of the amount in the table for the total gross income and the number of children. That’s not the quite the end either. We then also account pro rata for two things. Those two things are health insurance for the children paid on a monthly basis and work related child care for the children. You would pay 40% of those expenses in addition to the 40% of the prescribed amount.

Some of the primary deviations from the total amount would be work related child care and health insurance premiums. Also, there are special deviations/circumstances that can occur for many other things. Always consult with a professional to make sure the law is benefitting you the best way possible.

This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.