Welcome (back) to our Six Stones series. Our financial adviser, Jordan, is sharing as many tips, ideas and advice for people going through a divorce as a humble blog will allow. He’s staying away from specific financial advice – it’s all general advice over here, be sure to get personal financial advice before doing anything – but we hope you find some useful information in here as you navigate through/out of your divorce.
My last post started explaining some of the choices you’ll have to make as you work towards Cash Confidence.
The bulk of the work you’ve done so far will put you in good stead to get there – but the final 10% hides a lot of challenges, frustrations and pitfalls.
So in this post, I’m covering what some of these issues might be – and how you can deal with them.
There are a few big frustrations you’ll need to get comfortable with as you take back control of your money:
Not getting that thing / doing that thing you really, really wanted;
Implicit in properly managing your money is that you will need to, at some stage, sacrifice something.
It might be not buying that dress you look great in.
Or saying “no” to after-work drinks because the Smile account is empty.
Or having to pass on that extended weekend in Port Douglas because you don’t have enough in the Joy account to cover it.
Or seeing that royal blue Jaguar XF going for a song and having to say, “No, not this time.”
When this happens – and it most definitely will – it can sap the energy out of your money management efforts.
You’ll question why you should bother saying “no” when the people around you don’t have to.
I can’t stop those feelings – they’re utterly natural when you’re having to go without something you really wanted.
But what I can do is remind you to revisit what your Needs, Wants and Worries are.
Do you feel like they’re going to be harmed by this reality? Will they be improved?
What about your Ideal Future? We’re playing the long game here – maybe foregoing this trip will make it easier to take the one you really want to take in three years’ time?
Yes, it’ll mean you have to delay this particular piece of gratification, this time around.
But by doing that now – by getting back up after hitting this wall – you’re also bringing forward the point where you can do these things from a position of strength, security and confidence.
Which is way better than putting it on the credit card…
2. GETTING that thing / doing that thing you really, really wanted;
What’ll make you feel worse than not getting what you want?
Getting what you want.
You’ll feel ‘bad’ or guilty for ‘slipping up’ and buying that thing, booking that ticket or shouting that round.
It’s so silly, you’ll tell yourself, what was I thinking? You’ll berate yourself and ruin it entirely.
We’re not striving for perfection. We’re aiming for improvement.
There’ll be times where you spend more than you should, on things you don’t need – or even want.
Beating yourself up about it achieves absolutely nothing, it’s energy you’re using to corrode your own self-esteem.
So really, really try not to do that, ok?
Instead, think about how it happened.
How were you feeling at the time? Was there something going on that triggered it?
Go a bit deeper.
Was it worth it, even a little bit? Is there some positive you can take from it?
Finally, consider how you might try to avoid it happening next time.
Is there a circuit breaker you could deploy – like walking away, saying no, leaving it for another day.
Some sort of mantra you can say to yourself to avoid it next time?
Then next time you’re confronted with a similar situation, you’ll be a little more prepared than you the last time.
Remember, we’re grinding for centimetres here – it’s all about gradual improvements.
3. A Storm of Setbacks
The best intentions in the world can crumble in the face of life’s unfortunate realities.
It’s not unusual to have spent a few months improving your financial water cycle – setting up the accounts, working the ratios, monitoring the results, watching that Joy account slowly (too slowly sometimes!) grow.
Then BANG, the car won’t start / the fridge dies / the washing machine decides to start draining all over the laundry floor / the kids need the dentist urgently / a loved one falls ill and you need to care for them.
Any of these on their own could undo a lot of progress – but there’s nothing saying they can’t team up to really ruin your day, week, month or year.
This will truly deflate you.
It’s tough seeing all your progress disappear and be shifted over to expenses that nobody likes making.
There’s no pretending – it bloody hurts.
And “oh, why bother!” is not an uncommon reaction.
Every centimetre of progress you’ve made, every slight improvement, every good decision, choice and option will reduce the impact of these setbacks.
When you’re on the side of the road, steam billowing out from under the bonnet, kids in the backseat and the tow truck on its way, remember that all the work you’ve been doing has put you in the best possible position to deal with this problem.
When the dentist tells you that toothache you’ve been avoiding means you’ll need (expensive) surgery, think about the $200 in the Buffer account that you can put towards that unexpected cost.
It won’t cover everything – not yet – but it’s diluted the strength of the bitter cocktail you’ve been handed.
Perfection is not the goal; improvement is.
And having the funds to cover 10% of an unexpected cost is a lot better than 0%.
So don’t lament what you’ve lost – embrace what you’ve done to start preparing.
4.Those Damned Joneses
I mentioned earlier that I believe comparisons with other people are the root cause of a huge number of issues.
This is something I believe – deeply, wholly, permanently, vociferously.
We’ve always compared ourselves with other people, worked to define where we sit in the social and economic hierarchy.
And now social media – with the glossy Instagram feeds framed just right to hide the dirty washing and late lease payments, or Facebook with its articles like 13 Reasons You’re No Good, or Snapchat with all the parties you’re not at, Pinterest with all the stuff you don’t have or LinkedIn with all the success you’re not seeing – has made it easier to feel like you’re falling behind.
So seeing what your family and friends are doing, all the great fun they’re having, all the money they’re not worrying about, the life they’re having, is probably going to make you feel bad.
Immediate social comparison and shame, all conveniently in your pocket!
It’s going to make you wonder what on earth you’re doing not going out with them when your Smiles account has run out of money by the end of the month.
You can just transfer a few bucks across, anyway. It won’t matter!
It’s important to try and step around those feelings. Accept them (they’re a natural part of the consumerist world we live in), but don’t let them bump you off your path.
Because, frankly, none of what they have matters.
None of it.
Not the cars or the houses or the holidays or the toys or the clothes or the shiny, glossy lifestyles.
What matters is your life.
Your holidays, toys, clothes and lifestyle.
Living a life to keep up with those damned Joneses is like wearing other people’s shoes: it won’t fit.
Let them worry about what they’re doing, how they’re affording it or what their plan is.
Your job – your responsibility – is to consciously live your life in line with your capacity, aspirations, values and goals.
This is why I’ve spent so much of this series banging on about defining your ideal future and getting a grasp on the life you’re currently living – and recognising the gap between the two.
Until you have this awareness of what you want from your limited time on this planet, you will be vulnerable to the heft and might of the massive machine built to help you spend money you don’t have on stuff you don’t need – or want.
Breaking out of that cycle – by having clarity in your decisions and control over your money – leads to Cash Confidence.
After all, in my experience, the cheaper holiday paid in cash is much, much more rewarding than the fancy holiday put on the credit card.
5. Not Getting Anywhere
Maybe you’re new to this whole money management caper.
Maybe your divorce has meant a really, really big adjustment for you.
Maybe letting go of that life you had before is proving really difficult.
After all, going from caviar to sardines (to coin a phrase) is a hard shift, and a bit of whiplash is to be expected.
Because at some stage in this process, in this adjustment, you will feel like it’s not worth it at all.
You’ve done all this work and you’re not seeing any results. The bank balances aren’t changing, you’re not feeling more confident, you’re still having to say “no” a lot more than “yes”.
“What’s the point?”, you’ll ask. “Stuff it, we’re not getting anywhere.”
You know what? You’re probably not.
And that’s ok. It’s good, actually.
Because you’re also not going backwards.
After all, it’s meant to be a little tough – anything worth doing is difficult. And taking control of your money is unusual, so it’s got an additional degree of difficulty to it.
And the first period of this new process is more about tidying up than it is about steaming ahead.
It will probably take you around three months to work through your current situation, define your ideal future, get a grip on your numbers, set up your bank accounts and start monitoring your spending.
You won’t see any material progress in this period, besides a few more bank accounts and some nice spreadsheets.
Because what you also won’t be seeing are the decisions you would have made in the past, the backwards steps you’ve avoided, the money you would have spent.
Instead, that money is being diverted and directed in ways both conscious and aligned with your Ideal Future.
Push through that three-month barrier though and you’ll start seeing some small improvements.
The Smile account will start having a little more money in it at the end of every cycle.
The Joy account will start climbing. You’ll get close to your Buffer amount.
You’ll start seeing why you’re saying no a little more clearly, the link between today’s “no” and next year’s “hell yeah” becomes a little clearer.
Now, we’re getting towards the end of our Part One of our Six Stones series. My next post will wrap up what we’ve been talking about.
Of course, if you have any questions or want to talk about what we’ve been writing about – send me an email ([email protected]) or reach out via any of the social channels.