Podcast: Money & Post Divorce Finance Tips with Carrie Hausner Casden

Laura and Johnnie are joined by top business manager and certified money and financial coach Carrie Hausner Casden (Summit Financial Management). In the discussion, Carrie shares advice and insider tips on how to maximize pre and post divorce finances before and after the dissolution of a marriage is completed. Carrie, who went to Beverly Hills High School with our hosts, also quizzes Laura and Johnnie about their “Money Personalities,” which reveals some surprising results you won’t want to miss.

Click here to listen to the podcast.

Can Money Make or Break Your Marriage?

In the event of a divorce, stress can come at you from all angles. There’s the emotional turmoil, of course , but there’s also the financial fallout which can cause just as much anguish, if not more.d

Whether you are anticipating divorce or have just finished going through it, it’s commonly agreed upon that all stages of divorce pose highly charged emotional challenges. But even once you’re “done” with divorce,

dealing with the residual financial pitfalls of the separation can typically bring about a whole new set of overwhelming emotional issues.

Unpacking your financial baggage

We all come to adulthood with unique beliefs about money. We bring them into marriage, and then try to blend them with our partner’s financial background, which might be entirely different from ours. Disagreements over finances can lead to divorce. Surprisingly, in the majority of cases where money issues are identified as the significant conflict in the marriage, the issue isn’t a lack of money. Rather, the root problem is that the two individuals have differences in opinion about the meaning of money, and how they want to use it.

Understanding your personal relationship with money is beneficial to everyone else involved in your divorce as you navigate a time of such substantial change. Without this knowledge of yourself, you’re more likely to continue making decisions about money that might not be in your best interest.

We all carry money messages from childhood into adulthood

Money messages are formed in childhood and are then carried with us through adulthood. We typically receive money messages from both parents, which in some cases might contradict one another and lead to future confusion about the role money should play in our lives once we’re adults. Quite often, we go through life unconscious of the messages we received as children and how these affect our actions and patterns as adults. During my training to become a certified money coach, I learned that individuals tend to fall into one of eight main money archetypes, which I call your “money personality.” When couples fall in love and decide to marry, differences in money personalities are rarely explored until it’s too late.

Overspending can be a symptom of deeper issues

One of my clients, let’s call him Jon, was considered an incorrigible “overspender” by his advisors. Every money manager he worked with would give him a monthly budget stipulating exactly how much he should spend. He would agree to follow the plan, but just like someone on an ill-fated diet, he could only keep it up temporarily before falling off the wagon and blowing through the budget. Naturally, this pattern was a huge source of conflict in his marriage. It wasn’t until he really got in touch with the emotions behind his spending that Jon was able to start making some successful changes.

Another client, let’s call her Elizabeth, went shopping every day. From the outside, her friends assumed that she had plenty of money, a ton of free time, and that shopping was what gave her pleasure in life. After money coaching though, we realized these assumptions couldn’t have been farther from the truth. The reality was Elizabeth had been constantly criticized and judged as a young child by her parents about her appearance, and she was raised to believe her worth came from what she looked like. She had been overspending in a futile attempt to fill this emotional hole. This coping mechanism ended up making Elizabeth feel even worse. Shortly after making these lavish purchases, she would be overcome by guilt and remorse. Together she and I worked through dismantling those old money messages, and got to a place where she knew that, once she finished her divorce, she would have to live on a new and reduced budget. We put together a list of her values, and then she agreed to only spend money on the things that aligned with that list. Once she realized she was in charge of her own joy, it was easier for her to not attach her sense of self worth and happiness to a new outfit, car, or piece of jewelry.

Money coaching means getting emotional

Money coaching is different from pure financial planning. It’s unproductive to compose financial programs for an individual if it’s just about the numbers, or the “quantitative” aspect of money. Effective money coaching comes from a judgement-free place of honesty to help clients get in touch with the reason they spend and the emotions tied to their spending. That’s what we call the “qualitative” aspect of our money history. It’s only when my clients succeed in understanding this component of their relationship to money that they are able to modify problematic money habits and move forward.

Some people like to divide the population into two categories: spenders and savers. However, the reality is that things are rarely ever that black and white, especially when it comes to money. We need to understand the ways in which these categories blend together, which is done by taking some small action steps. For example, by taking a “money personality quiz,” we can determine which archetype someone is most closely aligned with. Once we identify that, we are able to make conscious and concrete actions to modify behavior. This allows people to become more mindful of their financial decisions and it puts them in the driver’s seat for their future, rather than remaining a passive passenger.

In my work with a wide variety of clients, I have found that before you can move forward, you need to look back and understand how you got to this point. Money represents so many things beyond numbers in a bank account. Most importantly, money represents emotions. We can all spend it differently in whatever ways we choose, just as long as those means create peace and joy in our lives.

Carrie Hausner Casden is a business manager and certified money & financial coach at Summit Financial Management in Beverly Hills.  She coaches clients across the United States toward financial wellness and to make smart fiscal decisions.  You can reach her at carrie@summitla.com

Managing Your Post-Divorce Finances

A client of mine going through a divorce came to me for financial coaching and we determined she would receive enough alimony and child support to last her between eight to twelve years depending on how much she would curtail her current lifestyle.  Both of her parents are deceased, she received no inheritance, has no siblings, and she and her soon-to-be-ex have one 14-year-old son (which means my client will only receive child support for the next 4 years.)

We talked about her next chapter in life and what it would look like.  I tried to encourage her to embrace the concept of new possibilities rather than remain stuck in the place of anger and fear.   While we all know being a wife and mother is a full-time career, my client had not worked at a job outside of the house during her marriage so she had very little confidence in regards to getting hired anywhere.

When we spoke honestly about what options were available, I offered three choices:  

  1. Get a job,
  2. Look for your next husband to support you
  3. Play the lottery.

While some may find this blunt and shocking, it was the truth and what she needed to hear.  After all, there are no other options for her to support herself, and the only certainty she has is that her support will end one day.

I suggested she start exploring career paths and begin training in a field that would suit her personality and reinforce some work skills she may be unaware she possesses.    There are many skills developed when raising children, running a household, and volunteering for a school, nonprofit, or community. I encouraged her to keep moving forward.

Her reply was simply “…I didn’t have to work during my marriage and so I don’t plan to work now, I would rather just get remarried.”  With no judgement in my voice, because I really feel one person can’t judge someone else’s choices, I said “Well then, we know what your focus needs to be.”  She decided to let someone else control her financial future.

Financial Challenges of Divorce

When I talk with clients thinking about divorce or clients who are already in the process of going through a divorce, I like to be very straightforward about the financial challenges they may encounter and the ways to manage their situation.

Of course, I am only talking about legal ways to achieve financial security, which typically include the following:

  1. Work to support yourself
  2. Manage your divorce settlement, (spousal and child support) to last your lifetime
  3. Start looking for your next spouse to support your lifestyle
  4. You are assured of an inheritance which will support you throughout your lifetime
  5. My favorite fantasy—you plan on winning the lottery!

Let’s explore the pros and cons of these options:

1. Support Yourself: This is always my go to, # 1 choice for men and women.  It is the most stable choice, offers security, and you will be the one who controls your destiny. If you are a spouse who has not been in the workplace while married, take time to think about career options and start taking one step forward every day towards a career path that will make your feel competent, capable, and secure, in addition to enhancing your self-esteem, which divorce can often shatter.

2. Spousal & Child Support: Even if you have been married for at least ten years or more to someone with enough liquid assets to support two households, if you do not sign a prenuptial agreement, most often you will not end up with enough through alimony and/or child support to last you for the rest of your life.  It may be enough for five, ten, even fifteen years but you want to start thinking of the next step if this is your situation.   It is never fun to know your cash will run out by the time you are seventy.

3. Marry Again:  If this is your plan, I will say it is a risky one, and one that may come with strings and sacrifices.  Putting your financial future 100% in the control of someone else is risky, and may cause a person some insecurity and instability.  Marrying a 2nd, 3rd, or 6th  time is also sometimes easier said than done.  None of us are getting any younger.

4. Inherit Money:  If you come from an affluent family and are the beneficiary of an           irrevocable trust, or if your family is willing to offer support, and the amount will be enough to sustain your financial needs for a lifetime, then you should consider yourself extremely lucky.  You can have the luxury of not worrying about bill paying and you can focus on your own personal development.

5. Win The Lottery: This one is my favorite.   I don’t know anyone who really would put this       at the top of the list for their financial plan but when I was looking at all the “legal” ways to earn money, I simply had to include this last option.

Be Responsible for Your Own Future

The bottom line here is there is never a free ride in life when you are totally depending on someone else to support you.  This requires some level of work dealing with another personality, compromising on things which are important to you, and trading your voice and power for their support.

However, if you face your reality realistically and create your own financial independence, the personal and financial rewards will be not only more beneficial, but you will be setting yourself up to feel empowered for your next phase in life.

Carrie Casden is a business manager and financial coach at Summit Financial Management in Beverly Hills.  She coaches clients across the United States toward financial wellness and to make smart fiscal decisions.  You can reach her at carrie@summitla.com