In this episode, we discuss another aspect of the financial issues we can face during a divorce. Last episode we spoke about money in vs money out during a divorce, while this time the focus is on the decisions we must make now that will relate to the life we will have after the divorce. The need to understand the difference between facing life as a team with your partner versus facing it as a solo player. Being alone is different, but that does not mean it has to be harder. 

When we are defining the possessions we will keep after the divorce, we should not be influenced by our emotions. We need to focus on what we need. We need to see if what we have is what we need. Perhaps we need less. Maybe we are fighting to keep an asset we will not be capable to maintain by ourselves. 

Maybe a good strategy to avoid putting ourselves in financial traps is leaving the heart in the bedside table before a divorce settlement. Learn why living above our means is something we need to avoid. 

Timestamps:

We live above our means when we’re in a relationship. [00:03:00]

The reason that many relationships break up.[00:04:00]

Sometimes the universe, or whatever it is you believe in, slap us in the face.[00:07:00]

What happens when we can simplify our lives. [00:10:00]

Should I keep the house or be happy?. [00:13:00]

Are we living in denial?[00:15:00]

 

Links:

My book: The Jelly Bean Jar – Empowering Independence through Divorce

https://tanyasomerton.com/shop/the-jelly-bean-jar/

Join my Free Facebook Group here:

https://www.facebook.com/groups/divorceangel/

Divorce Roadmap Session:

https://tanyasomerton.com/divorce-roadmap/

Transcription

Hey there, and welcome back to the divorce Angel podcast. Thanks for listening. I appreciate it. It means so much to me. If you’re new to the podcast, I recommend that you go back and listen to some of the previous episodes that I have done. 

Especially look at the ones so from 24 to 29, where I talk about my five-step process, and that’s where we take our clients from victim through to victor. 

The five steps are victim, overwhelm, acceptance, focus and victor. 

It’s a step by step process in each of those different stages which we’ve investigated and we’ve watched. It’s something that I lived and breathed as well. 

We’re able to move people through and get them as close to possible is getting their life back on [01:00] track.

READ MORE

It’s important to make sure that you go through each of these stages because the stats, here in Australia, are alarming. 

40 to 50% of first-time marriages fail, 70% of the second-time marriages fail, and third-time marriages fail on a 90% rate. 

That was the stats last time I have checked, about a year ago. It may have changed now. Even if it changed, that percentage is high.

The issue that I see today is that most people leave their first marriage without addressing the responsibility they needed to take before they step into this second and third relationships. 

For me, it’s key that we address all of that garbage so that we can make sure that we don’t take it into our next relationship.

We don’t want to be taken baggage next time around and we [02:00] certainly do not want to go through a divorce more than once if we can help it. 

It’s a pretty awful thing to be going through. And I don’t know about you, but I don’t want to be there again.

Go back and listen to some of the previous episodes, I’m sure you get some really good content out of them that might help you through your separation, and divorce. 

In this episode, I wanted to continue the conversation around money. 

Last week, I did an episode called “Divorce – Money in Money out” because it’s a key mistake that I see with a lot of people who are going through a divorce. 

The next thing that aligns with that is where most of us, and I was one of them, I was there, I know what it’s like. We live above our means when we’re in a relationship. 

3:00  

If there is a party, we go: “It is gonna be okay, there’s this family member can help us out. We can keep working, we can draw on our savings or on our super or something like that which will keep everything rolling along”. 

This stress from the relationship in the financial strain in most cases is shared between both parties in the relationship. But when the relationship comes to an end, people still want to live that life that they had before, and they can’t do it.

The truth of the matter is, in some cases, that the financial burden stress that was put one on each other, to live a life that you really couldn’t afford, has probably contributed to the downfall of the relationship. 

4:00  

Research shows that money conversations or money pressures are in most cases, a lot of the reason that many relationships break up.

The issue is when someone has lived above their means. They want to continue living that life when they separate and they can’t. 

They’re living in denial because they’re just not accepting where they are today and where they were a little bit earlier is not in the same place.

4:40  

Truth is, they could never afford to have been where they were before anyway. They were living so far above their means that it was putting so much pressure on both parties. That contributed to the downfall of the relationship. 

5:00  

I have a lot of friends and colleagues that are financial advisors. They were saying that people are earning such a lot of money, and they work hard, but they spend more than they earn. 

It’s not about what we earn, it’s about what we spend. If we’re spending more than what we’re bringing in, we’ve got an issue. 

So what I do with a lot of my clients when we do our strategy, is we look at the current income that they’ve got and what their outgoings are.  We ask if they can afford to stay where they’re currently living. 

Are they living well and truly above their means? Should they be looking at getting a new job or moving somewhere? 

6:00  

Is the rent or the mortgage they’re paying in current accommodation far too much? Does that mean that they need to move? 

That’s a really hard thing for someone to deal with, especially if you weren’t the instigator of the marriage breakdown. All of a sudden, you’re thrown into this emotional turmoil of “My relationship is over”

Now I also have to move from my home and take my children. This is when we get into that victim mentality. Why did this happen to me? 

I’ve been through that as well. I know what it’s like, but it’s certainly a place that we all seem to go to. 

We go there because it makes us feel okay at that stage in it and it makes us say: “This isn’t my fault. I shouldn’t be here. It’s not my responsibility” 

7:00 

Sometimes the universe, or whatever it is you believe in, slap us in the face, just to make us well and truly aware of the path that we were going down was not getting us to where we needed to be. 

Sometimes the debts and the financial strain that we put on a relationship is too hard then to turn around and to go back. 

We’re in so much financial stress that we say: “No, we’re selling this, we’re going to move out of here” 

I look back now and I was one of them, living on an acre and a half,  had a tennis court, a pool, the kids at the fancy school and two expensive cars in the driveway.

8:00  

To even contemplate that my standard of living needed to change because of my relationship breakdown was just another heartbreak to me. 

We sold that house and I moved into a rental property. I sensed it deep inside of me that this is a turning point that I can go and do what everyone else seems to be doing or I can do something different. I decided to do something different. 

 9:00  

I purchased three investment properties with that money. I’m not saying that that might be what’s right for you, but that was what I did. 

That’s what made me be able to deal with what I’d gone through. 

This is important to make sure that just because you’re giving up one dream, and that house or business that you’re now having to get rid of because you living above your means, does not mean that it needs to be the end of your dream.

You might be able to come up with something completely different that fulfils everything that you’ve ever wanted in life. The thing that I learned was once I got rid of the stress from the big house sorts of things once I was gone, my life got simpler.

10:00  

That’s the key here. If we can simplify our life, what happens is, in our mind, we can think of other bigger possible drains or wishes that might be able to come true.

If we get to the crux of us as human beings, we come into this life with nothing and we will leave with nothing. Is it worth the fight and the anguish and the heartache over an asset or over a life that we lived previously, that we have to keep and maintain now?

From my experience, they are so many other things that are more valuable in life than assets.

Men in a lot of cases will fight over the super, and women in a lot of cases will fight over the family home. 

11:00  

Is ironic that men will always want to fight to keep this super. 

Where men think of old age, and don’t want to be alone, and need money to be able to survive, women just think of the memories and the emotional stuff that happened in the house.

There’s a difference between how men and women think about what their financial futures will look like. 

So back to what we’re talking about here, what is a want, and what is a need. And once you realize the difference between the two, then you can start putting steps in place to improve your life. 

But spending time energy and emotions worrying about having to sell an asset or not being able to live the life you used to leave can just play you and at the end of the day, the outcome will probably be the same whichever path you take.

12:00  

If you are living above your means, and you need to sell something, whether you struggle to hold on to it and keep it right now, and you’ve got to sell it in a year from now, or whether you bite the bullet and do it now knowing that it’s inevitable, isn’t that the best thing to do? 

A client of mine, I would say she was difficult to deal with. To be honest, her behaviours weren’t the nicest to her ex-husband. When I did a budget and did her serviceability for loans and just looked at the upkeep of the house, she should not have kept the house. 

13:00  

The house was in a pretty Up-and-coming area, it was worth quite a lot of money. But for her, it was just about the win. She didn’t care really about where she lived. She had all the stories and excuses as to why she wanted to stay in the house. But ultimately, the house was in a little bit of disarray. It needed some work. 

When it looked at her budget, she was pretty much living above her means, but she was adamant that she had to keep the house. If something goes wrong with that property, she’s got no rainy day money. She’s got no way of fixing any of those assets. She used her children as an excuse to say no, I want my children to stay in their home. 

14:00  

The funny thing was the kids were trying to remove themselves a little bit from her because they could see their behaviour towards their father wasn’t the best. 

In the end, we were able to achieve what she wanted to achieve. And she got the house that she wanted. But will she be happy? No, because she’s not that sort of person. She wanted to win the fight and she won the fight. She got the house, and that’s what she wanted. Once she got to the house, was she happy? No.

If something happens to that house, it’s now become an anchor around her neck. It’s such a burden. And a few weeks ago, I drove past just to see what the property was looking like. And it’s such a big asset. She does not have the time to maintain the garden or to look after the garden because she’s got to get extra hours at work just to pay back the mortgage. Was it worth it?

15:00  

She’s the only one that can answer that. Is that where I would want to be? No way, there’s certainly no way that I would want to do that. Everyone gets the chance to think about what their future looks like. 

Don’t live in this denial that you have to stay where you’ve always stayed, that you have to have what you’ve always had, that now your identity is changed because you no longer have those assets that you had before.

Having a happy, fulfilled life will get you more value, more opportunity than having this big asset. 

Set up a budget, go back and review what you can and can’t afford. Ask yourself: “Is this asset that I want over everything else worth the fight?”

Go back to last week’s podcast and listen to this woman’s case. She knew that at some stage, she would have to sell the house and she made the decision.

That sort of thinking comes from a place of power because you are choosing your destiny, it is not being forced upon you. 

Having a real clear picture of what you want now that your relationship is finished, it can be the start of an amazing future for you.

17:00  

If there’s anything I can do to help you on this subject, please let us know. Send us a message or an email. I’d love to answer it. I get emails from clients now or listeners and I’d love to be able to help you if I possibly could. 

 

 

Recent Episodes

You Have The Power To Be Happy

Today's episode is about happiness. How to get to it and how to make happiness a state of mind. Sometimes everything looks about to collapse around us, and it...

read more

Follow Us

About  |  Terms  |  Contact