It is important to acknowledge and vent the feelings of anger, and disappointment. It is important to grieve the relationship. It is important to develop a support system of friends, family, divorce recovery groups, counselors and advisors. However, it is also important to add up the numbers so that personal challenges do not become a financial setback as well. You need a financial plan that reflects your new needs, goals and objectives.
A financial plan is a written report that reflects your current status, your goals (including lifestyle goals, tuition goals and retirement goals) and a path to get from where you are now, to where you want to be.
Key elements to a written financial plan include: budgeting, tax planning, retirement planning, tuition planning and estate document planning (such as wills and trusts). A recommended mix of growth investments, income investments and savings will be recommended to you based upon your score in a risk/safety questionnaire. This recommended mix is called an asset allocation. The asset allocation will lead to a projection of how the investments will eventually pay for tuition and retirement costs. Generally, it is better to start with a more conservative portfolio while you are going through the healing and recovery process.
Try to develop a financial plan as soon as you and your spouse realize that a parting is inevitable and as soon as you are emotionally able. There is still a possibility that you will weather the divorce a little better if you know that you and your future will be ok. Also, an individual financial plan may help you include items that are often forgotten in a divorce settlement, such as securing a portion of an ex-spouse’s pension and social security benefits.
You should be able to receive a basic financial plan for no cost or obligation from a financial consultant. Be sure to interview at least three consultants before agreeing to a financial plan, and look for a consultant who is interested in educating you and who uses layman’s terms. Generally, it is advised not to use your ex-spouse’s consultant.
Once you have found the right person to coach you through the financial planning process, request a questionnaire to take home with you. At home, collect your financial documents such as tax forms, benefits statements, bank statements, investment statements, retirement plan statements, wills, trusts, pre-nuptial agreements, postnuptial agreements, insurance policies, credit card statements, etc. Take the time to fill in the questionnaire honestly and completely. After returning the questionnaire to your financial coach, expect a wait of two to three weeks for the financial plan to be properly prepared. Once written, the plan should be thoroughly explained to you in a meeting that takes about an hour. Take the financial plan home with you and take the time so study it page by page before making any financial decisions.
Chances are, once you understand your financial plan, you will feel more grounded during a very stressful transition in your life. Begin to activate your financial plan, one piece at a time, and be sure to ask lots of questions. You may even find the process interesting and self-actualizing!
Whatever you do, take care of yourself during this stressful time. May you find good emotional support during this life challenge.
TERRI MILLSON IS A CERTIFIED INVESTMENT MANAGEMENT CONSULTANT (CIMC), PRESIDENT AND FOUNDER OF TRISUMMIT FINANCIAL WWW.TRISUMMIT.COM BASED IN NEWPORT BEACH, CA. TERRI HAS BEEN INVOLVED IN THE FINANCIAL SERVICE INDUSTRY SINCE 1986 . “TO ACHIEVE, WE MUST FIRST PLAN” IS TERRI’S MOTTO IN HER QUEST TO MAKE THE FINANCIAL GOALS OF HER PRIVATE INVESTORS A REALITY. TERRI IS LICENSED TO TRANSACT SECURITIES BUSINESS IN THE FOLLOWING STATES: CA, CO, FL, IL, MD, MO, NJ, NV, OR, TX, UT. FOR A COMPLIMENTARY AND CONFIDENTIAL CONSULTATION, PLEASE E-MAIL TERRI@TRISUMMIT.COM OR CALL TERRI DIRECTLY AT 949.757.0941 OR TOLL-FREE 800.727.0941. SECURITIES AND ASSET MANAGEMENT OFFERED THROUGH LINSCO/PRIVATE LEDGER (LPL) MEMBER NASD/SIPC.
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