Getting Divorced? 5 Reasons You Need a CDFA®

Getting divorced without a financial plan is like driving on a highway without your headlights. You have no idea where you’re going. Divorce is one of the biggest life transitions. It has a huge impact on your finances – both short-term and long-term.

If that’s the case, why don’t more people divorce with a plan?

There are several reasons. One, it’s hard to have a plan when you’re not sure where to start.  Two, it’s hard to plan when you’re riding an emotional rollercoaster. You need a voice of reason. You need someone to help you see clearly so you can plan for the future.

Times are changing. Having an attorney in charge of your finances doesn’t cut it. Attorneys and mediators are only present for the divorce proceedings. But what happens after the divorce? Who’s there to help you plan financially for this new chapter?

Contrary to popular belief, it is possible to have an affordable divorce.

If you’re going through a divorce or even just thinking about one, here are 5 reasons why you need a Certified Divorce Financial Analyst (CDFA®) in your corner:

 

They help you navigate the entire divorce process.

Let’s face it – divorce is financially and emotionally draining. Many people aren’t educated about their finances and lose a ton of money in the process. Contrary to popular belief, it is possible to have an affordable divorce.

Just because you have an attorney doesn’t mean your finances are taken care of. Attorneys are in a hurry to get the divorce over and done with so they can move on. They don’t always craft a settlement with their clients’ best interests in mind.

On the other hand, a CDFA® is your financial advocate. He or she is right there with you before, during and after a divorce. A CDFA® can talk with you about the steps you need to take to protect your financial freedom. He or she will also look closely at the needs of your entire family and come up with a creative settlement that’s a win-win for everyone.

CDFA®’s are trained mediators, which means they can get to the heart of a disagreement and come up with a solution that meets everyone’s needs.

They can save you time and money.

Divorce is expensive and time consuming. No surprise there. The average length of a divorce in the U.S. is one year. Many couples lengthen the process by arguing in court and racking up legal fees. Child custody battles alone can cost thousands and thousands of dollars (a topic for another post).

More time = more money.

A CDFA®’s goal is to reach an amicable settlement. Many CDFA®’s are trained mediators, which means they can get to the heart of a disagreement and come up with a solution that meets everyone’s needs (especially helpful if you have a stubborn spouse).

While everyone would like to divorce amicably, sometimes this just isn’t possible. In that case, a CDFA® becomes your personal advocate and will help make sure your voice is heard.

 

They offer financial clarity and serenity.

One of the biggest mistakes people make during a divorce is planning for today, not tomorrow. Think about it: your settlement needs to last the rest of your life. Isn’t it worth it to hold out for the best?

How you arrive at that settlement is the tricky part. Right now you probably have more questions than answers.  Should you keep the house or take a cash buy-out? How much money do you need to maintain your standard of living? What should you do about life insurance?  I’ve seen one spouse take the family home only to discover later that the other spouse had taken out a private equity loan. Suddenly their mortgage doubled.

A CDFA® can give you a realistic picture of your financial situation. He or she can help you take into account expenses such as life and health insurance, college education and cost of living increases before agreeing on a final settlement. That way, nothing is left on the table.

One of the biggest mistakes people make during a divorce is planning for today, not tomorrow. Think about it: your settlement needs to last the rest of your life. Isn’t it worth it to hold out for the best?

They help you manage household expenses.

If your spouse took care of all the bills when you were married, this may be foreign territory to you. You may have no idea how to create a budget, let alone manage one. The good news? A CDFA®’s work doesn’t end after the divorce. He or she can help you create a monthly budget, track expenses and handle fun details like taxes (kidding about the fun part). Most importantly, he or she can explain everything to you. No more trying to find your way through the dark. Now you’re in control. Feels good, doesn’t it?

 

They plan for the future.

After a divorce, it’s easy to get caught up in the day-to-day challenges of your new life. But you have to think long-term, especially if retirement is around the corner.

Choose a CDFA® who is also certified in retirement planning. He or she can work with you to plan for your retirement income. A CDFA® asks questions that you may not have thought of. For example: how long will you want to keep working during retirement? What are your income needs? What plans do you need to put in place for health care or long-term care? These aren’t fun questions to answer, but trust me, having peace of mind is worth it.

People always say it takes a village to get divorced. There’s a lot of truth to that. You need someone to help you make these life-changing decisions. Don’t try to do it yourself. You may save money in the short term, but you’ll incur significant costs in the long run (not to mention added time and stress). And who has time for that?

 

Feeling uncertain about your finances? Not sure you’re getting the best settlement?  Contact us for a free consultation.