All this month on the blog we are taking lessons from the C-Suite: the executive ranks of corporate leadership.
If you want to make sure you’re steering the divorce, rather than simply reacting to your ex-spouse or your legal team, you need to channel your inner CEO. If you want to ensure you get your divorce done as smoothly as possible you need to step into the role of COO (Chief Operating Officer). When dealing with all the people in your divorce (and there are more than you think, HR thinking is needed. And when it comes to money it’s time to become the CFO (Chief Financial Officer) of your divorce. So what can you learn about divorce finances from business?
Understand your cash flow
Cash flow problems can cripple a business. And they can cause problems for your divorce too. One of the biggest mistakes women make when embarking on the divorce is trusting that it will all work out. And, it will work out, but it needs you to have your eye on the ball – it won’t happen by wishful thinking.
Maybe the role of CFO comes naturally to you. Perhaps you’ve been the ‘household manager’ for some time and you understand what money you have available. But maybe your soon-to-be-ex was the money person in your relationship. If that’s the case, now’s the time to face your fears and get to know your money. What are you spending? Where is the money going? What money do you have at your disposal for your divorce?
If cash flow is tight you will need to be tactical about where you deploy your divorce spending. This is why it’s so important to have a plan (which you can make by channelling your inner CEO). Your plan will mean you can engage experts when you need them: to help with critical decision-making, or to help apply for a consent order on your financial arrangements for example.
Know your liabilities
What do you owe? Keeping tabs on your monthly expenditure involves you getting into the detail of your current accounts. You can divide expenses into necessary ones (such as rent or mortgage payments), nice to have and luxury. Remember, that if there’s enough money to go around, the court would not expect you to experience a significant change in lifestyle as a result of divorce. If it’s normal for you to have a number of overseas trips a year, and there is money in the marriage, there’s no reason why you should have to change that. So continue spending in your usual fashion: don’t overspend or move money so it’s hidden – that’s fraud. But you don’t need to scrimp either.
Make sure you take account of less obvious liabilities. Are there annual insurance or other payouts you will need to continue to make, for example?
Know your assets
Equally, make sure you know what assets you hold. It’s easy to underestimate the value of household contents, such as furniture, jewellery and artwork, so take your time and audit them properly. Also remember to take account of savings and investments. You may need to communicate with your soon-to-be-ex over your assets if they were the one who managed money. Do you know what bank accounts and other financial portfolios they hold? If you suspect they may be hiding assets, you can engage a professional asset tracer to help you.
Don’t be tempted to go snooping into their files or use their password to look at their accounts: that’s illegal and can land you in a lot of trouble. Get the experts involved. It costs money but is often an investment worth making. If you’re not sure how to navigate financial disclosure, especially if your ex-spouse isn’t playing ball, I can help you come up with a strategy.
Records are so important for understanding your numbers, and the family numbers. So many of our financial records are online now, it’s much simpler to track where money has gone and where it comes from. Yet it can still be a complex web to navigate.
If you’re finding it hard to track all of your wealth, it’s definitely worth investing in a specialist legal and financial team. They can help you understand your assets and liabilities, and where records are missing, help you track those too.
If you go to court to agree a financial arrangement, you’ll need to make a full financial disclosure, as will your soon-to-be-ex. So get on the case now – track down your records so you have those numbers to hand.
Do financial forecasts
Divorce signifies the end of your marriage, but hopefully a long and happy life awaits you afterwards! So you need to look after your future self. So many women make the mistake of sacrificing pension benefits for the sake of holding onto the marital home, for example.
Every situation is different, but the important thing is to think about your future. How will you support yourself into the future? If your soon-to-be-ex has been the main breadwinner, how will you achieve financial independence going forward? If you have children, what agreement will you reach about parenting (which will have an impact on your ability to work and earn) and their changing needs?
It can be tempting to want your divorce done and out of the way. But think about the rest of your life. What’s realistic, in terms of the wealth held within your marriage? Don’t leave your 65 year old self high and dry for the sake of avoiding difficult conversations now! A good CFO can anticipate needs and is prepared to have those conversations. If you need help developing your ideas and coming up with a plan, I can help you.
Get your finances sorted
If stepping into the shoes of a CFO is daunting, don’t worry. You can take it slowly. Don’t allow yourself to be bullied or rushed into big decisions. The important thing is that you face it rather than hide.
If you’re in The Absolute Academy you can access my five day financial challenge, which is all you need to start getting to grips with your finances. And everyone in there gets access to my coaching and expertise each week too, so I can help you navigate the financial maze. You can join our community of empowered, supportive women here.
And if you know you want me by your side as you tackle the specifics of your divorce, I’m happy to provide 1:1 coaching. The combination of developing your financial mindset and coming up with a personalised strategy for your divorce puts you in the optimal position for getting the divorce settlement you deserve.
Just book in a free call today to get started.
Emma Heptonstall, the Divorce Alchemist is the author of the Amazon best-selling book How to be a Lady Who Leaves, the Ultimate Guide to Getting Divorce Ready. A former lawyer, Emma is a family mediator and founder of Get Divorce Ready the online self-study and group programmes. Emma has been featured on BBC Radio, The Telegraph, the iPaper and in Marie Claire Magazine. Emma is also the host of The Six Minute Divorce Podcast. To find out more visit www.emmaheptonstall.com