Carefully managing your money can be a balancing act. This is especially true for those who have just gone through a divorce. And things can get even more complicated when divorce occurs after 50. Black Enterprise spoke with TIAA-CREF Certified Financial Planner Shelly-Ann Eweka for more insight into managing your money after you say “I don’t.”
BLACK ENTERPRISE: In general, how does divorcing after 50 impact finances differently from divorcing earlier in life?
EWEKA: Divorcing after 50 really impacts finances differently because you donâ€™t have as much time to recover. And often, retirement assets are split in two, and you may not have as much time to rebuild that savings.
BE: What should be the first financial step that both spouses take after they decide to divorce?
EWEKA: They should seek advice from a financial professional. This is a very emotional time, and thereâ€™s a lot to think about and a lot of financial decisions to make. A certified financial planner can help you with reviewing your overall financial picture and also help you with some of the decisions youâ€™ll have to make. For example, when youâ€™re divorcing, youâ€™re considering how to split up assets. You have to think about estate planning, especially if you have minor children. You also have to think about who will manage your finances if you become incapacitated, especially now that youâ€™re going through a divorce. You also have to decide who will keep the home. In addition, you have to think about whether your life insurance coverage is sufficient, and whoâ€™s debt is whose, when it comes to obligations such as a car loan or mortgage.
Often, itâ€™s hard to separate the emotions from the process, so a financial professional would be able to best help you with that decision. A financial planner can help you figure out what your assets are and what your liabilities are, and he or she can help you figure out how your goals have changed because of the divorce. You can seek out a certified financial planner who has additional certification in divorce care.
BE: What are some of the negative financial implications of divorcing after 50?
EWEKA: One major problem that people going through a divorce face are problems with debt. They see their debt increase sometimes because theyâ€™re getting a handle on managing their day-to-day and monthly finances without the extra income they once had. So itâ€™s important to make smart financial decisions going forward so that you donâ€™t get into any more debt than you might be in already. Second, having to possibly move out might bring on financial hardship. Your lifestyle might have to change. If you have to get a new home, especially if youâ€™ve lived in your current home for a while, homes may be a lot more expensive in the area you want to live in. And youâ€™re most likely going to have to scale back your lifestyle. You may not be able to do the things you used to do, so you’ll have to prepare financially for that reality.
Stay tuned for part two of this interview, where Eweka discusses how to rebuild finances after divorce.