The Financial Opportunities of Divorce. #4 Freedom


Assuming that I follow my own pep talk regarding facing my financial situation and dealing with it; assuming I protect my home, maximise my retirement savings and budget wisely; assuming I am able to move from a survival, to a modest, to a comfortable income; then in front of me – not despite but because of the divorce – an exciting world of opportunities are open to me. Now, being single, those discretionary expenses listed in my last post are mine alone to decide on.

I have choices.

I have dreams.

I have freedom ……………….

to do whatever I want………….

  1. Retire soon and be contented with a basic lifestyle.
  2. Work a few more years and relax in a modest lifestyle.
  3. Work a bit longer, save hard, and enjoy a comfortable lifestyle….. down the track
  4. Resurrect my previous career and work for a period in a profession that was lost.
  5. Reclaim my ‘me’.
  6. Become a new ‘me’
  7. Retrain and start a different career, in something I feel passionate about.
  8. Start a new business in something I feel passionate about.
  9. Sell my home, down-grade to a smaller home, and enjoy making my home my own.
  10. Move close to the beach
  11. Or into a city centre
  12. Tip most of the difference in funds from down-grading into retirement savings.
  13. Sell my home, invest the money, and volunteer abroad for a year.
  14. Use some of my funds from down-grading my house on a **FANTASTIC** holiday
  15. Buy a van and travel around for a year or more.
  16. Become more involved in charity work.
  17. Visit my children, family and friends more often. YAY!! 🙂 🙂 🙂
  18. Write a book.
  19. Learn to play the piano.
  20. Learn, learn, learn about a lot of interesting things.
  21. Write about everything I have learned in life.
  22. Finish things.
  23. Walk along the beach 🙂
  24. Dance
  25. Watch the sunrise each morning.
  26. Potter about
  27. Count the clouds in the sky
  28. Do nothing. 🙂
  29. Speak up for what I believe in.
  30. Contribute to making a better world

Please of choices.

Wow….. what an exciting time is ahead for me.

🙂 🙂 🙂 🙂 🙂


This is the tenth 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
9. My finances # 3 Priorities
10. My finances # 4 Freedom

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The Financial Lessons Of Divorce #3. Priorities

ID-10093950 piggy bank.DanI have previously covered the topic of human needs. Needs tend to be hierarchical in nature with lower needs required before higher needs. It tends to follow in the order of – survivalstabilityconnections esteem – experiences – giving back. If basic needs are not met one can become stressed or have a hollow feeling of something missing. You have to fill lower needs first, become strong at your core, then move upwards to building your esteem. With strength within, you can then start giving back to others. Aiming too high before strength has developed, can make everything collapse due to a weak base.


The same concepts can be applied to our financial situation. To provide for our needs,  financial costs are required. The same hierarchy exists – survival – stability – connections – esteem – experiences – giving back.


Herein can lie the issue after divorce. Before, both my emotional and financial lower needs were fully met. My lifestyle and expenses moved up; up to worthwhile activities for my esteem (hobbies, projects), savouring experiences (travel, entertainment, eating out), and giving back (philanthropy, community projects, and family). When my whole world crumbled, and with it my strong base, as I kept trying to feed higher needs I was used to, my lower needs crumbled further. I had to prioritize my needs in the situation as it stands today. That means thinking of myself, meeting basic needs first, growing a secure savings net next, planning activities (and expenses) that will provide me with connections or improve my self-esteem, then moving upwards to life experiences and helping others.


These are my financial priorities:

1. Survival

  • My Home and utilities.
  • Essential living costs. Food, healthcare, basic clothes.
  • Minimum loan repayments on debt


  • Communication. Phone, internet.
  • Safe, reliable car. Petrol, maintenance.
  • Transport, travel and accommodation costs in visiting my family.

3. Stability

  • Disaster prevention – insurance
  • Paying debt off
  • Save for emergency fund

4. Discretionary

  • Time. Labour saving appliances, cleaner, tradesmen.
  • Goals and projects. Education, sport, music, crafts, hobbies, books, computers
  • Experiences. Travel, eating-out, entertainment, holidays, festivals, social events.
  • Beautiful things. More clothes, furniture, cars, boats, cameras, musical instruments, jewellery, ornaments, paintings, ‘stuff’
  • Philanthropy. Helping others, community projects, volunteering, gifting.
  • Accumulation of savings, investments.

The Lessons From Divorce

  • A basic lifestyle # 1 provides only for essentials, a modest lifestyle adds in a level of security from lists #2,3. A comfortable lifestyles allows some choices from #4.
  • I initially classed the first 3 lists ‘essential’ until I realised some people cannot afford them.
  • What I previously regarded as comfortable was in fact luxury. After separation, I dramatically cut down our couple luxuries of excessive experiences (it being my husband who tended to need this buzz) and too much ‘stuff’.

My Comfortable Lifestyle

A. My New Basic Budget

  1. I include all items on Lists #1
  2. Even though not essential, I include all items on lists #2 & 3 as they are essential for me, especially communicating with and visiting my family.

B. My Choices From Discretionary List 4.

  1. Maintain essential insurance, eliminate non-essential.
  2. Maintain savings schedule for emergencies and unexpected costs.
  3. Embark on meaningful projects.
  4. Experience moments with special people or those activities that give me meaning. A lot of things I enjoy have little cost such as walking, reading, writing. An occasional meal or drink with family or friends, family gatherings, can still be enjoyed. Watching the sunrise costs me nothing.
  5. Maintain savings schedule for higher discretionary costs. Don’t go into debt for them

C. The Items I Have Eliminated Or Reduced

  1. Impulse purchases of discretionary items.
  2. Non-essential ‘stuff’ – trashy magazines, newspapers, books, fashion accessories, household items, gadgets, music, hobbies, hair costs – except for items that fall under #B3 above (meaningful projects).
  3. Reevaluated travel plans, house upkeep and entertainment in terms of budget.
  4. Cut out bought lunches & coffees.
  5. Halved my grocery bill, buying less meat, more vegetables and pulses, hardly any processed foods. I am shopping at the farmer’s market. I diligently use up food at the end of the week, plan menus ahead, and shop from a list.

D. As for ‘giving back’?

See point B3 above.

This is so empowering to be taking control of my life again, one step at a time.

🙂 🙂 🙂


This has been the ninth in a series of posts on My Responsibilities

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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.



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


Image courtesy of [CoolDesign]:

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.

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