I cannot emphasize enough how important it is to have your own resources to sustain yourself. You never know what will happen– you or your partner might get sick, either one of you might suddenly die, or you may just split up. Of the three, the last option is actually the least scary of all to me, but you have to self insure for that possibility. How do you that? Well, let’s see…
1. Savings– Do you have at least a 3 month reserve for your necessary expenses in an account in just your name? If not, you have to start putting aside a little bit each month to do this– and yes, this might mean not eating lunch out so much, drinking coffee at home instead of at a cafe, and cutting back on other non-essentials. During the recession, I had to teach a lot of my clients about budgets, and the new mantra many of us had to embrace is “do I really need this?” Every little bit counts, and the more you can set aside for a rainy day, the less anxious you will be about that possibility.
2. Earnings– Do you have your own sources of revenue, and if you had to could you live on what you yourself generate? If not, then what can you do to maximize your own income potential? You need to be self-supporting. This is key to not only achieving total independance, but to being able to protect your integrity and not having to suffer any fools– at work or at home.
3. Credit– Do you have your own credit resources? If your cards are maxed out, you are living beyond your means, and you need to make debt repayment a top priority. If you credit sucks, you need to figure out a way to fix that, fast. Credit is key not just for loans and job opportunities, but to lower your cost of living. The better your credit, the cheaper the insurance rates, the lower you pay in security deposits, etc. There’s also another benefit that is less obvious– the more responsible you appear, the more likely you will be to get a loan from family and friends in the event of a real emergency. If you are a financial basket case, people will be far less likely to want to lend you money.
My friends and clients that have decent savings, earnings and credit have managed to avoid financial disaster when hit with a crisis, such as death, disability or divorce. As emotionally upset as they might be, they have at least managed to avoid being economically devastated. Recovering from emotional setbacks is relatively easy, but a financial implosion is incredibly hard to weather, and it will take years to dig out from under that kind of mess.
It is funny that 15 years ago when I graduated from law school I naively thought I wouldn’t have to do math anymore, and yet what I do more than anything is deal with numbers every day. For those of us in the divorce world, when your partnership is dissolving, aside from custody issues, all we are really doing is re-distributing assets and income, and you would be shocked at how many people have not paid attention to their budgets, have very little in savings, and have not protected their credit scores. Sadly, there is no quick fix to any of these things, and watching the harsh reality hit people like a ton of bricks is very painful to watch.
So, if there is one lesson I can pass on to you after all these years, it is this: Save as much as you can, earn as much as you can, and be responsible about spending and managing your money. You never know when a crisis will hit, so make sure you have your own F-you money!
By Regina A. DeMeo, Esq.