Michelle A Monson Klisanich, CFP®, CDFA, CLTC® Lead Financial Consultant – Thrivent Financial® has been a financial planner for eight years and is passionate about helping women with their finances as it relates to divorce. This passion started after experiencing her own divorce a few years ago. Her goal is to empower women by educating them about their financial situation, so they can move forward in their new financial life with confidence. Dr. Deborah Simmons is co-owner of Partners in Healing of Minneapolis. For 18 years she has been guiding people from trauma and loss to hope and strength. She offers a number of different therapies that heal trauma, including EMDR and clinical hypnosis.
QUESTION: What advice do you have for women who are going through divorce?
- Deborah: That your life will rebalance again. I’m not sure when, but it will. Have hope going forward.
- Michelle: Connect with people you trust while you’re going through the process. The more educated you are on financial matters, the more confident you can be to make smart decisions.
QUESTION: What advice do you have for having a Divorce Team?
- Michelle: You’ll save money in the end by having a team of experts. Your team could include a financial expert (a CDFA), a tax accountant, therapist, mediator, attorney, parenting consultant. Make sure to not mix up their roles too. Attorneys aren’t therapists or financial planners. Financial planners aren’t therapists or attorneys
- Deborah: Don’t be intimidated by learning new things from your professional team. You can be afraid and still come out better than you expected financially and emotionally.
QUESTION: What have you learned from your clients?
- Michelle: Women getting divorced are experiencing so many emotions that’s it’s difficult for them to think straight. The more you rely on your Divorce Team to get divorced, the clearer they will be able to help you think. It’s tough to take emotions out of the decision-making so rely on people to help you.
QUESTION: What is the importance of therapy during or after divorce?
- Michelle: Therapy helps take the emotions out of making financial decisions, which is crucial.
QUESTION: Divorce is a costly process. How do I keep from freaking out?
- Deborah: Talking to professionals you trust will reduce you from spazzing out.
QUESTION: What’s the biggest change a person has to make after divorce?
- Michelle: Often times after a divorce, people expect to live the same lifestyle they had before. You have to be realistic about your spending and be open to changing your habits. It’s also important to give yourself time to reflect on your new life and new goals. I recommend people not make big elective financial decisions for at least 6 months to a year.
- Deborah: Amen! I see many people who are still walking around with their designer coffees. Making coffee at home tastes just as good. Decisions made out of anger, fear or grief are often regretted.
QUESTION: How will I ever pay off my debts?
- Michelle: Some debt is good debt, some is bad. Credit cards need to be paid off as soon as possible. Take your time with good debt, such as student loans, mortgages, etc. Most people get tax breaks from this good debt so it’s OK to not pay it off too quickly. I often see people paying off car loans as quickly as possible, and in doing so, they are racking up credit card balances or not saving into retirement as a result. I don’t recommend this.
QUESTION: What practical advice do you have after the divorce?
- Michelle: Make financial decisions slowly and carefully. Take time to develop your goals and where you want to be short-term and long-term. Meet with a financial planner to put a plan in place to achieve these goals. Know that small steps are better than not doing anything.
- Deborah: You may be forced to move from a house to a smaller place or apartment or moving in with a parent. This can feel awful and a step backwards in your life. Be practical. This is the first of several transitions. You are getting your feet back on the ground and figuring out your money as well as your lifestyle. You are saving money or paying down debt. These are big achievements. This can lead to calmer decision making about the next transition to another home or a new career. It also gives you time to deal with your grief.
QUESTION: What practical advice do you have during the process?
- Michelle: As I mentioned, your lifestyle will likely have to decrease after a divorce. Set up a “trial savings” to dedicate a monthly amount to try and live off less as soon as possible.
- Deborah: Don’t panic. There are always choices to make. Unfortunately people often don’t like the choices they have.
QUESTION: What is the importance of having a financial counselor when considering or going through divorce?
- Michelle: Any major transition in life typically causes someone to feel frozen to make decisions, especially financial ones. It’s important to have a financial counselor to discuss your concerns so you can get un-paralyzed and move forward with a solid financial plan.