The Financial Impact Of Divorce #2. Survive

“This is about life. It is one wave after another wave and you are struggling to go on……If you survive, you can tell the story, you can go on. If you don’t survive……..  that’s it.”                                      Maria Belon. Tsunami 2004 survivor.

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In any grief, trauma, or catastrophe the first step always is survival. If you can get through a day, a week, a month; then you can keep going. You can survive.

In regard to finances then, the first step is to stop sinking, stop going backwards. The next step is to stay afloat. The third step is to move forward. Here is what I have done so far and intend to do going forward.

1. Let Go Of The Losses.
In losing anything there is a grief process you need to go through. If you lose your former financial security, you need to mourn that loss just the same as the loss of a person. There are stages to pass through of shock, denial, anger, and sadness until finally you let go of what you had. I have found it really important to let go of what could have should have been, and to stop looking with envy at friends and family of the same age who are moving on to blissfully peaceful and financially secure retirements. This is gone for me now …. although not necessarily forever.

2. Face The Reality Of The Changed Situation.
Until you face it, you cannot do anything about it. I have taken stock and reviewed my complete situation – my assets, my debts, my insurance, my will, my superannuation fund, my home, my savings. I know exactly where I am at. I will move on to a different life.

3. Protect My Home.
My first drive will be to protect my home. This will mean ridding myself of all debt over it as a top priority over the next year or two.

4. Remain Debt-Free
Once I have cleared the last of the debt, I will remain debt-free. This means not using credit cards to buy things that I cannot afford or do not need.

5. Build Up Asset Base
As described in the last post, after the property settlement is finalised I will have a depleted asset base which, on its own, is inadequate to see me through my retirement years. I aim to rectify that by a series of options (isn’t it great having choices?)
(a) Delay Retirement for 5-10 years preserving my retirement fund intact to allow it to grow
(b) After the business goes, find another means of making an income
(c) Downsize my home to release capital to invest.
(d) Put all available spare funds into my retirement fund

6. Take Control Of My Budget and Spending
Rather than wait until retirement to begin living a more austere and simple lifestyle, do that now. Not only will it provide me with the comfort of knowing that I am living within my means, it will prepare me for my retirement years. If I learn to live on less, then there will be more to put away. That nest egg will grow faster and I can reach that blissful place (of financial security) sooner. Yay! 🙂
This is how I aim to do it…….
(a) Set my budget for a ‘comfortable’ lifestyle.
(b) Track my spending diligently.
(c) Ruthlessly cut every unnecessary expense from my budget
(d) Look out for discounts, bulk specials, and controlled use of card points.
(e) Aim for a simpler lifestyle.
(f) Live frugally

7. Take Control Of My Health
(a) Keeping healthy will keep medical costs down and be easier on the budget
(b) Healthy eating requires more home cooked meals and this is easier on the budget
(c) Walking more will increase my exercise and keep me fitter and healthier and will also decrease transport costs.

8. Prioritise The Use of Spare Money
This will be the aim of a ‘Comfortable’ Lifestyle which I will outline in my next post.
_____________  _______________  _________________  __________________

This is the eighth in a series of posts on ‘My Responsibilities’.
1. Responsibilities
2. My own needs
3. My basic needs
4. My health – diet
5. My health – exercise
6. My Home
7. My finances # 1 Sinking
8. My finances # 2 Survive

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Image courtesy of [CoolDesign]: FreeDigitalPhotos.net

The Financial Catastrophe of Divorce #1. Sinking

This is the seventh in a series of posts on ‘My Responsibilities’.

No-one likes to talk about money and I am going to break through that barrier and talk about it anyway. We talk about happiness yet are reluctant to admit the part money plays in that or its role in our sense of security, one of our basic needs.

To comprehend the financial impact of divorce, there are issues to be understood.

A. Where Does Money Come From?

1. Superannuation, retirement funds, investments, savings.
2. Earnings through employment, business.
3. Government pensions, charity, inheritance

B. What Are Our Needs From Money?

1. Essential Needs: Shelter, basic living costs.
2. Non- Essential. Lifestyle, discretionary, savings, gifting, debt reduction.

C. How Much Money Is Enough?

Studies show increased stress in people who cannot meet essential needs. Above that, happiness levels rise to a point. Thereafter, increasing levels of income do not produce a greater level of happiness.

D. How Much Money Do I Need?

Approaching sixty, I would be happy if I owned my home, was debt-free, had adequate retirement funds to provide a comfortable lifestyle, with a little savings tucked away. I am not there yet.

E. What Is a Comfortable Lifestyle?

A basic lifestyle provides only for essentials. A modest lifestyle provides some non-essential items such as insurance, communication and owning your own car. A comfortable lifestyles allows some lifestyle choices such as occasional travel, entertainment and hobbies but nothing extravagant.

You need to account for higher costs in clothes and transport if working, additional costs if you have dependents, any house mortgage / debts, and amounts to put away in savings.

What Is The Impact Of Divorce?

I was travelling along earning a living, leading a comfortable lifestyle, and accumulating savings. After divorce it will be gone – the accumulated savings, the comfortable lifestyle, the means of earning a living.

(a) Depleted asset base

Approaching sixty, we had our house and investments for retirement. One important point to understand in divorce is that, even though one may have a sound ‘total asset’ base, as far as providing for living costs into the future, only those assets available for investment can be counted, not those funds tied up in the home. Come divorce, there are two houses to come out of our total asset pool, one for me, one for him.

The remainder of our assets are crumbling away in divorce costs, forced sale of investments in a poor economic climate, and the impact of the divorce on the business value. This depleted asset base will be halved and the resultant asset base for each will be about one fifth our original investment base. This is, looking at part A above, a catastrophic change to financial affairs for someone approaching retirement.

(b) Earnings through employment or business

My new asset base, if I retired today, would struggle to provide me with basic living costs throughout my retirement years. As that is distressing, I initially chose to continue with the business. After my epiphany, and wanting closure on our previous life, the business will now go. There goes the second source of money from part A above, the means of earning a living.

(c) Impact On Lifestyle

As a single person, my living costs are as much as three quarters of that of a couple, yet the financial ramifications of divorce will see me losing both my source of earnings and sound asset base.

I have pondered and researched these impacts. What I have learned is:

1) I am better off than many. After divorce, some end up with just their home, no home and / or mountains of debt.

2) What I previously thought was ‘comfortable’, was in fact a ‘luxury’ lifestyle, (though still not extravagant). What I previously thought were ‘essentials’ (such as owning a car and having insurance), are in fact discretionary.

3) Money does not make you happy. Inner peace makes you happy. However, there is a minimum money requirement for peace and happiness. If you don’t believe me, watch this closing movie scene where Will Smith finds himself out of the soup kitchens into secure employment.

How I plan to provide  myself with a level of happiness that, for me, means a ‘comfortable’ lifestyle will be the topic of my next 2 posts.

Image courtesy of [CoolDesign]: FreeDigitalPhotos.net

My home. My sanctuary.

This is the sixth in a series of posts on ‘My Responsibilities’

After food and shelter, one of our primal basic needs is safety, peace and comfort. This can be provided by a place, a person, an activity, or by a combination of these. I wrote about my own need for stability in an earlier post. Previously my marriage provided me with this feeling as no matter where I went, what I did, or whatever adversities befell me; I felt safe and secure. Since my marriage collapsed, I have gained this sense of stability and comfort from my home. From my childhood days of playing ‘house’ to a strong nesting instinct when pregnant, I have always been aware of the comfort my home provides me. I have clung on to my home as my source of refuge, as my relief from distress and turmoil, as my source for solitude, as a means of feeding my mothering instincts with visits from my family. It has been my one constant in the unravelling of my previous life.

Whilst I have been comforted staying in my home since my marriage ended, and initially revelling in living my way within its walls, I have grown to realise that it has actually been living our life, my way, rather than making a new life of my own. Since my epiphany I have been striving to break free to live my life. This will mean a gradual process of selling the business, the commercial property housing the business, then selling my home to release capital for retirement. At that point it will mean leaving behind my one constant, my sanctuary.

For a period after my epiphany, my mind fast-forwarded to where I would be in about 3 years and I resented being where I was. I was coming home alone at night to the cold and dark. It was dreary and depressing. I began neglecting my home. Then the downward spiral began of neglect, followed by being overwhelmed by what it would take to get back routine and order, followed by losing the sense of comfort it previously provided, to seeing only a mountain of work and yet another thing I have to face.

Being uplifted by my daughter visiting last week, the sun coming out this weekend, and early spring flowers beginning to bloom, I have now recharged. In the spirit of my recent posts on responsibilities, I have taken on board getting my home back in order and restoring it as my sanctuary, yet also preparing it for my eventual move. At the same time, I will spend this transition period drinking in the last remaining time I have here, taking in every sunrise, looking at every blossoming flower, watching the moods of the river and valley opposite, reliving every happy memory I have had here with my children, of our previous happy family life. Then, when all that is done, it will be time for me to move on.

Plans to make MY Home MY Sanctuary

1. De-clutter immediate space.
2. Rid the house of ‘our’ stuff.
Note: I had previously rid myself of ‘his’ stuff. It is time for the next step.
3. Go in small manageable steps; one drawer, one cupboard, one box at a time.
4. Pack up ‘our’ stuff. Send it to him for him to deal with.
5. Avoid further clutter by not buying any more ‘stuff’.
6. Have a look around at everything left and decide whether I really need it or not.
7. Chuck out anything I don’t need, anything not used for two years, gifts given to me I don’t really want, clothes that will never fit again, and anything kept ‘just in case’.
8. Enjoy the space and freedom a minimalist habit without ‘stuff’ brings.
9. Revel in the peace and calmness that has taken the place of ‘stuff’.
10. Develop a routine to keep things this way by putting away things when not in use, having a quick daily tidy-up and a proper fortnightly one. Resolve to do an annual clean-up.
11. Look out and enjoy the views to the valley and the river every day.
12. Keep smiling and stay calm.

“I am responsible to maintain my home as a refuge of joy, peace, comfort and relaxation.”

Image courtesy of [amner]: FreeDigitalPhotos.net

My Health. My Responsibility. # 2 Exercise.

This is the fifth in a series of posts on ‘My Responsibilities’.

Exercise
This area of my life is my downfall.

My husband was a keen athlete, participating in both individual and keen sports, all of which came easily to him. Rain, hail, or shine he was out running, kayaking, skiing, lifting weights, or cycling. Meanwhile I was inside looking after the children or cooking or cleaning or at my desk working. Sometime after he left me, I found a crumpled piece of paper of his jottings where he had drawn up a table, listing various attributes in the first column, then giving a score for both him and me in the next two columns. I presume this had been him weighing up whether we were really suited to each other. He included such things as socialising, dress sense, punctuality, and physical exercise. Needless to say, he had scored me very badly on physical exercise.

I was quite upset that he would draw up such a list after a 40 year relationship. I was angry that part of his decision to leave me was made after consideration of what I thought were personality differences and that, even if there were differences, a good marriage is all about tolerating those differences. There was not a hint of consideration of deep values such as kindness, honesty, and compassion; that I had always thought our marriage had been based on.

Initially in the throes of divorce grief  “I’ll show you” angry phase; as well as a complete makeover and spring-cleaning of the house; I focussed on my well-being, diet and exercise. I became quite fit and healthy. That all fell away when I fell down into the “complete and utter sadness and misery” phase at which stage I was quite content to remain a motionless blob for days at a time..

Then over time, focussing on my inner self and affirming my values and beliefs, some reverse illogical psychology also came into play for me.

A dog has four legs, fur and a tail.
A cat has four legs, fur and a tail.
Therefore a cat is a dog.
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Husband exercised every day. .
Husband dumps wife of 37 years without warning.
That is not an admirable trait.
Therefore, exercising everyday is not an admirable trait.

Floored logic.
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With the best of intentions, I do sometimes start an exercise programme and keep at it for some time. Then things crop up and the exercise gets shoved aside. So in my new take-responsibility-for-myself frame of mind, rather than start an intensive programme that will surely fail, I have decided to start a new approach to physical activity. I read this on another blogger’s post last week of always doing “something” physical every day. There is no need to feel guilty if it is not a marathon run, or two hours at the gym as long as it is “something”. So I can pass the test even if I only manage a 20 minute walk because that is better than nothing at all.

Interestingly enough, this philosophy works.

While too often I am rushed for time, with too many other more ‘important’ things to do, it is hard to find that hour or even a half hour for exercise. However, I can always find twenty minutes. In fact I can find twenty minutes twice a day. I can even making finding that twenty minutes a habit, a life-time habit. I can make those twenty minute episodes full of fun, and I can combine this strategy with a great walking adventure at least every fortnight.
One week down, so far so good, and I will update you further down the track and let you all know how I am coming along.

🙂  🙂  🙂

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Image Courtesy [Grant Cochrane] / FreeDigitalPhotos.net

My health. My responsibility. # 1 DIET

This is the fourth in a series of posts on ‘My Responsibilities’

I have a dreadful family health history with my father and his mother dying relatively young from strokes; and my mother having had high blood pressure and diabetes for many years. From my youngest days I have had a voice inside of me telling me to take responsibility for my own health through dietary means.

• As a young teenager, I cut out chocolates, confectionery and junk fatty foods having observed that people who consumed a lot of these foods were overweight.
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• When I was fifteen, my father had a heart attack and our family diet changed drastically. Gone forever were saturated fats of butter, cream and fatty meats. Sadly this was too little too late for my dad who passed away from a stroke 5 years later.
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• After being diagnosed with post-natal high blood pressure at the early age of 28, and scared of my family history of strokes, I went on a series of strict diets including the Pritikin diet, amongst others with an emphasis on salt restriction. I managed to bring my blood pressure under control.
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• My second son was a failure to thrive suffering bouts of diarrhoea and respiratory ailments. After a two year struggle I did some research and took him to specialist immunologists at Sydney’s largest hospital. After an exclusion diet and food challenges, he was diagnosed with food sensitivities reacting to preservatives, colours, MSG; plus salicylates and amines found in natural foods. With his modified diet, I was able to keep him happy and healthy throughout his childhood
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• On the same diet, I discovered ailments I had suffered, such as asthma, were triggered by certain foods and food chemicals. More importantly, I ascertained my high blood pressure was triggered by foods high in biogenic amines, found in aged and fermented foods such as cheese and wine. Excluding them from my diet, I have been able to control my blood pressure and at the age of 59 am still drug-free. Interestingly, many foods high in salt are also high in amines (cheese, preserved meats) and my earlier dietary exclusion of salt also reduced amines.
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• After finding “the answer” for my son and myself through diet I went on and did a post-graduate course in nutrition so I could help others.
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• Over time I modified my diet to one that continued to be low in fat and salt, and also low glycaemic and high in soluble fibre. A low glycaemic diet helps control appetite and prevents the spiking of blood sugar levels. Foods high in soluble fibre reportedly help lower blood cholesterol.

Despite this theoretical ‘perfect’ diet; when under stress, when feeling glum, when I do not feel like cooking, or when busy, the diet can slip away. The diet entails a fair amount of home prepared meals. Not only are restaurant and cafe foods laced with preservatives and spicy foods I cannot eat; they rarely offer low glycaemic foods such as barley, lentils, and beans. Even oat-porridge is a rarity on ‘breakfast menus’. Foods I can eat when out tend to be high-glycaemic which do not sustain me and I tend to overeat.

To get back on track I need to focus on my health benefits as being as important as the busy things I am doing. I have to re-rate it at a high level of importance, just as I did when my son’s health was at stake, just as I did when I wanted to make sure my children’s mother (me) did not die prematurely from stroke.

This last week I have got back on track. I have restocked my pantry with the right foods. I have taken the time to prepare foods to take to work. Most importantly, I am focussing on my eating pattern and its long-term health benefits, as being as important as the crucial big-picture decisions confronting me in my life at the moment.

Menu for the day
Breakfast: Oat-porridge with soy-milk and chopped apple
Lunch: Brown rice, with bean and vegetable salad.
Dinner: Barley, lentil and vegetable soup. Chicken optional.

Yum, yum

Gradually the old (good) habits are returning. Onwards and upwards to a healthy long life.

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Beans Image Courtesy [Witthaya Phonsawat] / FreeDigitalPhotos.net

Oats Image Courtesy [Grant Cochrane] / FreeDigitalPhotos.net

Responsibility for basic needs

This is the third in a series of posts on ‘My Responsibilities’

At a time of crisis, say after a flood or earthquake, people’s needs return to those very basic needs of food, water and shelter as they begin to rebuild their lives. The ending of a marriage is similar to such a crisis, especially if it is unexpected and sudden. It rocks the very foundation of your life; your self-esteem, relationships, your emotional and financial security. As everything comes crashing down, to cope and survive you cocoon yourself by living in the moment of waking, eating, walking, eating, and the comfort and security of a warm bed at night. You are thrown into a survival mind-set of fulfilling these basic needs because everything else is gone. In the early days post separation, in a state of turmoil, I was comforted by focussing on my basic needs for some months by following a healthy diet, engaging in a gentle exercise programme, and restoring routine and order back into my daily life. Then my initial enthusiasm wavered. Why?

1. Reason # 1: I became overwhelmed by the ‘big-picture’ changes required of me. I did not have the time, energy or inclination to focus on trivial daily activities.
2. Reason # 2: I did not see who would benefit from what I was doing.
3. Reason # 3: I was focussing on short-term gains rather than long-term outcomes.
4. Reason # 4: Doing the right thing seemed like deprivation (eg dieting, budgeting).
   
   Pep talk to self:
   These are all just excuses.
   – It is time to stop blaming the divorce and its emotional upheaval for my lack of inclination to do what is right for me.
   – Having spent all my adult life putting my family first, it has been difficult to put myself first. I have to keep reminding myself that the person who will benefit from all this effort is me. I am important enough to make that happen. Moreover I can only be good for others if I am strong and healthy and calm myself.
   – When short-term goals (eg: weight loss) are the focus, rather than long-term outcomes (eg: good health), enthusiasm wavers at times of stress or when a short-term goal has been achieved and then discarded.
   – After a while, if habits are formed and results are seen, the effort will no longer be seen as deprivation but just how it is.
   – Keep going, you are worth it.
   

So lets begin……..
I have listed here aspects of three basic needs that I will be taking responsibility for, together with a long-term desired outcome for each and the first steps to take to get there. I will be posting brief progress reports on the side panel of my blog in each of these areas; and over the coming weeks will outline the plans in more detail.

Health

My desired outcome: To remain independent, fit, healthy, and active into my old age.
My responsibilities:

• Follow a healthy eating pattern one day at a time.
• Engage in a regular exercise programme for at least 5 days a week.
• Spend some time each day in a relaxing activity.
• Keep up with my annual medical checks

Home and Routine

My desired outcome: Simplification of my life to reach a state of calm
My responsibilities:

• Get into a daily and weekly routine for my activities
• Achieve a balance of work, home, and leisure.
• Simplify and de-clutter my surroundings

Financial Security

My desired outcome: Financial independence
My responsibilities:

• Set a budget. Cut down discretionary spending. Stick to the plan.
• Plan for a secure financial retirement
• Take control of personal affairs.

Message to self:

“I am responsible for my own health, sense of calm, my home and my finances”.
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Image Courtesy [Digitalart] / FreeDigitalPhotos.net