Divorce and Financial Survival
No one gets married with the expectation of getting divorced someday. Regrettably, though, divorce rates are expected to continue climbing. Divorce affects all areas of your life, including your financial health, and can result in significant challenges.
If you’re struggling through a divorce, there are several things you can do to minimize the negative effects on your finances.
Consider These Options To Help You Financially Survive A Divorce:
- Come to an agreement on how to divide your assets. A particularly difficult thing in any divorce is the decision of who gets what. You and your spouse both may have an economic and emotional investment in almost everything, from the house to the art collection you acquired together.
Try mediation. Mediation can be a money-saving alternative to the courts. This way, everything is a process of give and take, agreed upon under the guidance of an unbiased 3rd party. You can opt for methods of dividing your assets that are financially best for both of you.
- It really is beneficial to avoid having the lawyers get involved in the process. Once the legal system is formally involved, the process is much more expensive and financially and emotionally draining.
- For example, with investments, it’s usually better to divide them and sign them over instead of selling them and dividing the money; this because selling them can generate considerable fees and taxes. If you go to court, the courts may order the sale of the portfolio, making you liable for the fees and taxes.
After the Settlement
Trying to cope after the divorce is never easy. Once the divorce is settled, the unhappy fact is that you will most likely be less financially well-off than you were before the divorce.
Just as there are habits that will make you rich, there are others that will make you poor. Habits aren’t always easy to break. When you see the damage caused by these common practices,though, you will be highly motivated to get them out of your life once and for all!
Here Are Seven Common Money Habits That Can Prevent Positive Progress:
- Not having a budget.Everyone needs a budget, even if they’re making a million dollars a year. Spending money is easy, no matter how much you have. If you don’t set some parameters, things can get out of control in a hurry.
- Sit down with all your monthly bills and set up a simple budget. Keep the little stuff in mind, too, like coffees before work or snacks at the gas station. Those small expenses can really add up.
- Carrying credit card balances. No one can consistently invest well enough to offset credit card interest. Take a look at your last statement to see just how much your credit card is costing you. Depending on your interest rate and balance, it can easily be thousands of dollars a year.
- Not setting up an IRA. Time truly is money. Get your IRA set up as soon as possible and put some money in it. The funds you’ll have at retirement are heavily dependent on when you get started. And IRAs are wonderful retirement tools. Fund yours as fully as you can each year and watch your retirement grow.
- Not saving. If you pay everyone else first every month, there never seems to be anything left over to save. Pay yourself first, and then pay your bills with what’s left. Many employers can have earnings automatically deducted from your paycheck and put into a separate account. Save some money every month. [ Note: this is probably the most quoted advice ever. Know why? Because it works and because, so many people don’t follow it.]
- Buying new cars. A new car loses an enormous amount of value in a very short period of time. Look into certified used cars that are only a couple of years old. Frequently, you’ll be able to find a car at half the cost of a new one, with minimal wear and tear. These cars usually have warranties, too.
- Letting the small stuff get out control.Take a close, honest look at how much the small stuff is hurting your bottom line. How much are you spending on fancy coffee in the morning? Do you go out to lunch every day? How about snacks? Magazines? A soda at the convenience store? Look at your bank statement to see what’s really going on.
- Small leaks can sink ships. Fix your leaks before they get out of hand.
- Not taking advantage of your employer’s matching contributions. When you don’t take advantage of matching employer contributions, you are just leaving money on the table. With the average employer matching between 3% to 5%, this can add up to a large amount over the course of your career. Factor in compound interest, and this can be very significant in your retirement years.
- Employer contributions should be viewed as free money, because that’s exactly what they are. Would you pass on money that someone handed you on the street, with no strings attached?
Did you think about your own money situation as you read through the list above? Consider which habits are having a negative impact in your life and resolve to eliminate them immediately. Accumulating wealth can take time, so it is important to start as soon as you can. If you determine to fight these bad habits with everything you have got, you can watch your monetary success grow year after year.
Seven Key Differences Between the Rich and the Poor
Nearly everyone wants to be rich, but not many are. Why do so few people have real
wealth, even though everyone desires it? Certainly, there must be some fundamental
differences between the rich and the poor that can account for the differing levels of
Rich people often seem capable of generating amazing things in things in their lives.
And many with less money seem to be stuck. You wouldn’t be alone if you concluded
that this is due to some difference in abilities or work ethic. But if you look closely at
the rich people you know, you’ll likely find that most aren’t particularly lucky,
intelligent, or hardworking
Let’s Examine Some Actual Fundamental Differences Between the Rich and
1. Rich people attempt to create a specific life for themselves; poor people
believe they have no control. If you don’t believe you can create the life you
desire, why would you even try? But if you can envision what you want, you
stand a chance to get it.
2. Wealthy people dream much bigger. Tell your poor friends that you want to be
a millionaire and see what they say. You’re likely to hear something like this,
“No one needs that much money. You can live fine with a lot less than a million
- Do you think that a person who says things like this is ever likely to be wealthy?
- People who are poor always tend to think small.
- People who are rich dream big.
3. The rich play to win, and the poor play not to lose. This is significant. The rich
are quite bold and are always searching for a way to win when money is
involved. The poor are too busy worrying about preserving what little they
have. They never give themselves the chance to become wealthy.
4. Opportunities vs. obstacles. Those who are wealthy tend to focus on the
opportunities and then simply deal with the obstacles as they arise along the
way. The poor have a habit of focusing on all the obstacles.
Focusing on problems makes it very difficult to find solutions. A
problem-oriented mindset also can cause challenges in staying motivated.
By keeping your eye on the prize and staying focused on solutions, you’ll
find continually moving forward to be much easier.
5. Commitment counts. The rich do an excellent job at staying committed to
achieving their goals. The poor are good at dedicating themselves to dreaming
about their hopes instead of making goals out of them.
Although you may have fun thinking about how great it would be to be
rich, that’s not going to make your desires happen. Set a goal and then fully
commit to it.
6. Peer group matters. We all tend to rise or fall to the level of our peer group.
Have you ever noticed that the rich hang out with other rich people? Spend
time with wealthy people if you want to succeed financially. You’ll be amazed at
how your perspective changes when you hear people talking about how they
made $2,000+ in a single day.
7. The rich constantly learn. You’ll find that wealthy people are usually learning
new things, especially when in regard to making more money. The poor
frequently have an attitude that they already know everything they need to
know. Don’t stop learning.
Developing the habits and attitudes presented in this article will go a long way
towards improving your financial situation. It’s never too late to start, and you’ll be
amazed at how quickly you can turn things around. Start today and you can change
your financial life forever!