Lessons Learned From A Financial Pro
In my role as a certified divorce financial analyst, I have witnessed the good, bad and ugly when it comes to the impact unchecked emotions may have in the divorce process. And none of us are immune; this type of major life change has a way of bringing out the worst in us. But there are lessons we learn in the process.
Sometimes a spouse will erupt with white, hot emotion at the slightest remark or hurtful glance. The spouse on the receiving end of this emotional outburst may respond with an even more intense reaction, thus setting off an ever-escalating argument.
Occasionally the spouse receiving this emotional outburst does not respond at all, frustrating the emotional spouse all the more. This repeated lack of emotion can be just as detrimental to moving the divorce process forward as the other extreme.
Whatever the range of emotion that a divorcing couple brings to the table, knowing how it can affect the chances of receiving an equitable settlement and learning to keep it in check are crucial to a successful outcome (regardless of which end of the emotional spectrum you find yourself).
Two examples will illustrate my point: A few years ago a woman came to see me. She had been divorced for five years and needed some financial planning advice. During her divorce, she had insisted on keeping the marital home, while forgoing her portion of a very profitable family business. Having a $1 million home was the most important thing to her; it was where she had lived for the past 20 years and where her children had grown up.
Fast forward: because she let her emotions lead her decision-making, she realized, after the fact, that her income as a personal trainer was not enough to support her monthly expenses.
By the time she came to my office, she had maxed out the equity in her home and was facing a major financial crisis. Having no other assets and no other source of income, my advice was to sell the home; this recommendation was gut wrenching, especially when with proper planning her predicament could have been avoided.
Lesson learned: Basing major decisions on pure emotion can have devastating consequences.
On a positive note, here is an example of how keeping one’s emotions in check can result in making sound financial decisions.
Earlier this year a woman going through a divorce came to my office looking for financial planning guidance. One of her most important objectives was to keep the $1 million vacation home where she and her children summered. It was my job to determine a way she could keep the home.
I quickly realized it was not financially feasible to keep her home. At our next visit, I shared the numbers with her. She was very upset and her emotions bubbled to the surface. Our meeting ended quickly and on a sour note.
At our next meeting, she stated, “After calming down, I realized I couldn’t afford to keep this property. Plus, this is where my husband has his affair — there is no way I want to spend time in the same house where he was unfaithful. I now realize it is time to move in a different direction.”
When she made this statement, I recalled thinking how I admired her even-tempered approach and commended her ability to reduce the emotion from such a difficult and emotion-filled issue.
Fast forward: As a result of her change in attitude, she was able to secure an equitable settlement, purchase a new home and have the financial means to vacation at an alternate site with her children.
Lesson learned: Considering major decisions using an emotionally balanced approach can have extremely positive outcomes.
Suggestion: If you find yourself in a similar emotional state, try not to make any decisions. I strongly recommend physically removing yourself from that situation. Take a break, go for a walk, exercise, or watch a movie. Do something that will improve your peace of mind. Then when you are ready, come back to the issue. You may be pleasantly surprised how problems that once looked bleak and insurmountable become opportunities in disguise!
