Leah Hadley [00:00:01]:
Welcome to Intentional Divorce Insights. I'm Leah Hadley, certified divorce financial analyst, accredited financial counselor, and the founder of Intentional Divorce Solutions. I'll be your guide through the complexities of divorce, finance, and emotional wellness. Join me as we uncover practical tips and empowering insights to help you navigate your divorce with clarity and intention.
Leah Hadley [00:00:25]:
Hi, and welcome to another episode of Intentional Divorce Insights. Today, we are diving into a topic that's not only practical, but it's empowering, and that's smart investment strategies for starting fresh after divorce. Now whether you've recently finalized your divorce or you've been on this journey for a while, investing is a key step toward building financial stability and achieving your long term goals. Now I know firsthand how overwhelming the financial side of divorce can feel. Been there myself and I've worked with countless others who felt unsure about how to manage their money after such a big life transition. But here's the good news: you don't have to figure it out alone and it's never too late to take control of your financial future. I'm going to say that again it's never too late to take control of your financial future. Before we jump into today's episode, I want to remind you that we do have a upcoming free masterclass From Separation to Security: a Guide to Post Divorce Investing, and if you are ready to feel confident about your investments and start building a brighter financial future, this workshop is for you.
Leah Hadley [00:01:43]:
So I will share all the details later in the episode, so stay tuned for that. So let's start by talking about the unique challenges and opportunities that come with life after divorce. So divorce is one of the biggest financial transitions you can go through. You might have gone from sharing expenses in a 2 income household to managing everything on your own, or maybe you're navigating new responsibilities like budgeting for child support, alimony, or even rebuilding your career, it's okay if you're feeling overwhelmed. The key is to take one step at a time and here's where I recommend starting. Pull out your divorce settlement and take a very close look at the financial assets that you've received. This could include retirement accounts, it could include real estate, cash settlements, investments. Understanding the value of these assets and any restrictions on their use is crucial.
Leah Hadley [00:02:49]:
And keep in mind that there are other steps that have to happen to get these assets titled into your name if they were in your spouse's name previously, and so make sure that you're following through on all of those assets. Track your income and expenses. You can't make a solid financial plan without knowing where you stand today. So create a detailed budget that includes your monthly income, where it's coming from, when you're receiving it, how much you're receiving, your fixed expenses, make sure you have a good solid handle on what you're committed to each month, things like housing and insurance, your utilities, and then really track those variable expenses so you have a good clear understanding of what you're spending on groceries and what you're spending on eating out or entertainment, things like that. It's also really important to have a good handle on any debts. So if you took on any debt during or after the divorce, you wanna prioritize paying that down. High interest debt like credit cards should be probably addressed first, but you always wanna look at your overall financial picture in order to really prioritize things for yourself. By getting a clear picture of your financial situation, you are laying the foundation for a strong investment strategy.
Leah Hadley [00:04:14]:
So once you have that clear sense, you want to really look at redefining your financial goals. It's time to think about where do you want to go. Divorce often gives you the opportunity to redefine those goals. Maybe your priorities have shifted or maybe you're starting to dream about things you never thought possible before. Here are a few examples of goals that may resonate with you: Building an emergency fund: this is very common post divorce because a lot of times people deplete their savings during the divorce process. It is one of the most important steps you can take to protect yourself financially. You want to aim to save 3 to 6 months of living expenses but if that feels overwhelming, the important part is just to get started. So even if you're doing $25 a week, it's going to add up over time.
Leah Hadley [00:05:10]:
Some people have goals around their children's needs. So if you have kids, you might be thinking about how to fund their education or other big expenses. Start by exploring options like 529 plans, which offer tax advantages for education savings. Retirement, of course, is a big one. Nobody wants to work forever and retirement planning can feel intimidating, especially when retirement accounts are divided part of the divorce process, but don't let that stop you from taking action. Even small contributions to an IRA or a 401 ks can make a big difference over time. Other goals you might have, this is your chance to dream big. Maybe you want to travel more, start a business, move to a new city, whatever it is write it down so you could start to build a plan around it.
Leah Hadley [00:06:04]:
Now remember, your goal should be specific, measurable, and time bound. For example, instead of just saying I want to save more money, try I want to save $30,000 for a down payment on a house within the next 3 years. That would be a specific measurable time bound goal. Now let's talk about the nuts and bolts of investing. If you are new to investing, you might feel like it's too complex or risky but the truth is investing does not have to be complicated. With the right strategy you can grow your wealth and achieve your goals. Now, here are the steps to creating a smart investment strategy post divorce. Of course, we will go into these much more detail in the upcoming masterclass.
Leah Hadley [00:06:55]:
Understand your risk tolerance. Your risk tolerance is your comfort level with the ups and downs of the market. Ask yourself, how do you feel if your investments lose 10% of their value in a year? Do you need stable income from your investments or can you focus on long term growth? If you're not sure about your risk tolerance, there are tons of risk tolerance questionnaires that can be really helpful in helping you to understand what your comfort is with investment risk. 2, diversify your portfolio. Diversification is a fancy way of saying don't put all your eggs in one basket. By spreading your money across different asset classes like stocks, bonds, real estate, you can reduce your overall risk. For example, stocks offer higher potential returns over time but do come with greater volatility. Bonds are more stable and can provide a steady income over time.
Leah Hadley [00:07:56]:
Real estate offers both growth and income potential, right? 3rd is to align your investments with your goal. Each goal you set should have an investment strategy tied to it. For example, if you're saving for retirement, you're really focused on long term growth for those investments. Now if you're saving for a child's college education and you're looking at a 529 plan, it really depends on how close they are to enrolling in college and when those funds will be used. You may want a more conservative strategy if they'll be using those funds in the next couple of years. If you're building an emergency fund, a high yield savings account or a money market account can be good places to get a small return on the the fund but keep it liquid and easily accessible. Number 4 is to stay informed. The financial world changes constantly so you do want to make it a habit to review your portfolio at least once a year and adjust it as needed.
Leah Hadley [00:09:00]:
Now before we wrap up, let's talk about some of the common mistakes to avoid to avoid. It's easy to make impulsive decisions when the market dips or when you're feeling anxious about money, so you really want to avoid that emotional investing. Stick to your plan and don't let your emotions drive your decisions. Another important one is ignoring tax implications. Taxes can have a huge impact on your investment returns. For example, withdrawing money from a retirement account before age 59 and a half usually comes with penalties, whereas if you wait to withdraw until after 59 and a half, you wouldn't be subject to those same penalties. Number 3 is neglecting estate planning. Don't forget to update your will, your trusts, any beneficiary designations after your divorce.
Leah Hadley [00:09:56]:
And number 4, very, very common mistake, is procrastination. The longer you wait to start investing, the harder it is to catch up. Start small if you have to, but get started most importantly. Now to help you take the next step, I am thrilled to invite you to my upcoming masterclass From Separation to Security: a Guide to Post Divorce Investing. In that masterclass, you'll learn how to create a personalized investment plan, strategies for protecting and growing your wealth, common mistakes to avoid when managing your portfolio. And we're gonna have all the details about the masterclass and the link to register in the show notes, but just know that it's January 29th at 1 PM EST. It's online. There's no cost to attend.
Leah Hadley [00:10:48]:
And I always get the question, well, what if I can't attend live? So when you go to register, I have a little section where you can fill out if you have specific questions you want me to address during the workshop. Please do put any questions that you have in there, especially if you can't attend live. We always send out the recording when we do these free workshops. So as long as you're registered, you'll get the recording for that. And again, the link to register for that is down below in the show notes. I want to thank you for joining me today on Intentional Divorce Insights. Remember, starting fresh after divorce is an opportunity to create the financial future you deserve. Now if this episode resonated with you, please share it with somebody who could benefit.
Leah Hadley [00:11:33]:
Until next time, take care and stay empowered.
Leah Hadley [00:11:40]:
Thank you for joining me on Intentional Divorce Insights. It's a privilege to share this time with you. I hope each episode offers valuable guidance to navigate your journey. If you find our content helpful, please leave a review to help others discover the benefits of intentional decision making in divorce. Until next time, take care and continue to embrace your path with intention.
