Saving Money

How to Invest Your Money Post-Divorce

Divorce can be a financially trying time where one feels that her head is barely above water. There still may be attorney fees to pay along with the cost of buying a new house.  Your alimony and child support may not be what you had anticipated. Or you may have received a bid chunk of cash and not sure of how to invest it.

I bought a house during the end of my divorce and my priority was paying off the mortgage, so I would not have to deal with it when my alimony ran out. Look at different policies to ensure that there is not a penalty for paying it off before the fifteen or thirty year loan expires. An acquaintance who had a bad break-up, has a ten percent penalty if she pays off her mortgage early. She did not read the fine print. I paid extra every month and used most of my divorce settlement for paying off the balance. I like having this security.

Meet with a financial planner who charges by the hour and has no vested interest in certain investments. Working with one who only gets commissions may steer you into a plan that pays a high commission to them. This happened to one women who ended up with a lousy annuity and lost a chunk of its value when she dumped it post-divorce. Word of mouth is one way to find reputable financial planners, but check their web sites and the Better Business Bureau to get a fuller picture.

I looked at financial institutions that did not give their CEOs and top echelon multi-million dollar salaries or bonuses. I checked out who has low fees, paid less to administrators, and has been in business for a while. I found Vanguard ticked all of these boxes. Investments that reach a certain dollar amount do not pay, or barely pay, an administrative fee. My divorced friend is quite happy with Charles Schwab and feels she pays less in fees.
divorcedmoms.com/articles/where-to-invest-your-money-following-your-divorce

Keeping your money in line during divorce

Divorce is always difficult and there’s rarely a smooth way around it. Big money divorces regularly make the headlines and serve as a constant reminder that the process won’t just take its toll on your emotions, but also your bank account.

If you are thinking about divorce, it’s important that you understand how costly it can be. For example, the court fee for filing a divorce in the UK is currently (as of March 2014) £410. In addition, fees are required to obtain your final order and conclude financial arrangements.

Solicitor Fees

You’ll most likely require some form of legal advice before you start the divorce proceedings. Hiring a solicitor may seem expensive; however, the cost of attaining expert guidance could be minimal in comparison to what you could lose.

Hiring a solicitor will help to secure your assets and ensure you are as protected as possible. Fees can significantly vary on a case-to-case basis and the more you can resolve yourself, the less it will cost. Using mediation or collaborative lawyers could also reduce expenditure. In addition, there are plenty of free online resources available that will help guide you through the process.

According to Money Advice Service most solicitors will charge between £100 and £200 per hour to draw up legal documents that contain the agreement between you and your partner. If you use a solicitor to negotiate finances and assets on your behalf it could cost between £3,000 and £10,000.

Other Costs

Aside from the legal aspects, there are plenty of other costs that you must discuss before getting a divorce. For example, who will pay for your child’s living costs? Who will move out of the house? Do you have a place to stay when the procedures begin? Can you afford the rent without your partner? Will you be able to accommodate buying and moving costs?

Children can be particularly at risk during divorce proceedings, which is of course heartbreak for any parent. One way that Cathy (co-author of this post) is watching her money is by setting up a trust for her little one. One of the benefits of a trust fund is that it does not fall in line with the other assets that can be at risk during divorce proceedings. You can find out more about trusts on this page.

Getting Financial Aid

There is currently no form of financial aid to help cover divorce fees in England, unless you can prove evidence of domestic violence. If you believe that you qualify for financial aid you must contact Civil Legal Advice. They will tell you whether or not you are entitled to support and may also provide a mediator on your behalf. This can cause much emotional strain, but it is crucial that you protect yourself and ask for help if you feel you have been threatened in any relationship.

If you can’t afford your divorce fees and staying with your partner isn’t an option, then you may have to borrow money and could be entitled to litigation funding. This is a loan which is specifically granted to cover legal fees. Not many financial service institutions will provide litigation funding, and if they do, they’ll most likely deal directly with your solicitor.

Going through divorce can be one of the most emotionally challenging times of your life. Dealing with the financial arrangements and your assets can cause a great deal of unnecessary stress. Without taking the appropriate procedures you could find yourself significantly out of pocket. If you would like advice about how to handle your divorce, contact a specialist that really knows how to take care of the proceedings in a professional, and most importantly, heartfelt manner.

Written by Jessica Baker (@JessBaker89) and Cathy Graham of Mercer and Hole

Divorce tip: Beauty for Less

When you are going through a divorce or other life transition, you may be on a tight budget. You still require high quality products that are plant based for healthy  skin. You do not have to down grade to cheap products full of chemicals, but rather upgrade to ones that deliver a powerful punch for rejuvenation. Your skin becomes sallow and more wrinkled with insomnia and stress.

Boots pharmacies  in the UK, have their own lines of skin care and are available stateside at Target and other retailers. Botanics are particularly packed full of botanicals and are endorsed by Kew Gardens in London, along with Oprah and some leading physicians. Theses products are  reasonable starting at $8.99 to around $24.99.

I really like the Facial Oil 100% organic which is $8.99. The Facial Serum Triple Age Renewal and the matching eye serum have orchid as one of the plant ingredients and sell for around $16.00. I use the facial super balm($8.99) as both the top layer of moisturizer and as a night eye balm.

Boot’s No. 7 line has the popular Protect & Perfect skin serum which has undergone studies endorsing its qualities. The No. 7  Overnight Hand Treatment ($14.69) makes my middle aged hands look young. The No.7 foundation and blush is made in France and is every bit as good as the high price department store ones that I used in the past.

Lumene skin care from Finland also is plant based and usually under $25.oo. These can be found at CVS Pharmacy and Walgreens, sometimes on sale. Prevent future problems by taking care of your skin now with these nurturing and reasonably priced items. Not only will you look and feel better, but your budget will too.

Financial Fasting a New Trend

Financial Fasting works much like diet fasting does when one reduces calories for a day of two a week.  This is particularly helpful for those just emerging from a life transition, such as divorce. Fasting may be short lived, such as when one wants to lose a few pounds before a special event. Or it can be long term, as some of my European friends do. Think of your finances in a similar vein. UK’s Women & Home magazine’s August 2013 issue has an article describing this latest trend.  Cut down on expenses for one or two days a week and spend your normal amounts on the other days. This will get you ahead of the financial game and put some extra cash in your bank account.

You may want to just have a designated time period for this financial fast, such as three months with an option to extend it.  For me, seeing a short-term goal makes it easier to do.  The article suggested the usual, bring your lunch and leave your credit cards at home on fasting days.

It also suggested viewing the financial fast as a trade.  You are giving up some extra frivolous expenditures for something that you would really enjoy, such as a facial.  You could have a special ongoing goal as my sons and I do. We have a vibrant pottery canister that is our “Travel Fund.”  We forgo extra clothes, gadgets, etc and put that money into the Travel Fund.  We fast financially, by going to coffee shops instead of expensive dinners.

Give this Financial Fast a go and see your dream reached a little quicker.

How to pay off your mortgage

Tips on paying off your mortgage quickly.
1. Have your mortgage automatically withdrawn form your bank account with a set addtional amount to go to the principle itself.  For example, I doubled my mortgage amount with the other half going directly to my principle.
2.  Put ALL extra dividends, bonuses, tax refunds, inheritance, etc directly to your principle.  Make out a mortgage slip and send that in as  an extra payment to your principle.  It doesn’t matter if they are small amounts as long as they are clearly marked “principle”.  If you get large sums of money sporadically, such as artists do after shows or when paintings sell, put a good chunk of that to the principle.  I am friends with an artist family and they blow big chunks of money on frivolous items, but moan about their mortgage.  Any extra money that comes in, that is not your salary, put towards the principle.
3.  Check your mortgage policy.  Is there a prepayment penalty?  If so, see if you can have that mortgage transferred to another institution, which doesn’t have such restrictions.  Maybe you can have your mortgage loan refinanced at a lower rate.  Your monthly loan payment can be reduced if you put a certain  amount down on your mortgage.  For example if I put at least $5000.00 down, with a small fee, my loan payment was recalculated and my monthly payment became less.
4.  Some people are putting large amounts of money into their savings accounts and investments, which don’t accrue the same amount of interest, as the interest owed with a mortgage.  For example, last year I paid $1648.00 in interest with my mortgage, but did not earn any where near that with my small savings and investments.  I pulled money out of my small investments, sold heirloom silverware, etc and paid off my mortgage!  Now instead of paying $1648.00 in yearly interest, I can EARN some interest.
5.  More ways to pay off that mortgage:  Do you use great aunt Sally’s sterling silverware ?  Do you need your predivorce wedding china and crystal?  Then sell it.  Wouldn’t your deceased relatives be glad that you have a  completely paid  roof over your head?  You can put an ad in your local paper, sell items online or take them to a consignment shop.  I’ve sold some less expensive heirlooms at garage sales.  This money adds up and put  it towards your principle.
6. Live simply and put extra money  not spent, towards your mortgage.  Buy kids clothes at the thrift stores, some items still have the tags on them.  Go out for lattes instead of dinner or lunch.  More in later blogs about saving  money.  Stay focused on your mortgage goal and you will accomplish it, as I did.
7. Read some books or articles by experts, such as Suzy Orman to get you on track.
8. If you have a larger living space than you need, could you downsize and sell it, buying a smaller abode?
Could you take in a paying roomate, if you don’t want to sell it?
9. Be creative and you will be surprised how quickly you can obtain this goal.

New way to cancel your mortgage

Here is an ingenious way to get rid of a mortgage.  My neighbors had a big mortgage and a business that was feeling the effects of the recession. This is what they did. They switched houses with another family and moved into one that had the mortgage paid.  They gave up their bigger, close to town house, for one that was more out in the country.  They no longer had a mortgage, so could get caught up financially. The commute into the city only added about 12 minutes per way, so it wasn’t too bad for them.
If you need the equity out of your house and don’t want to sell it, then you may want to consider a credit line which is tied to your house.  Check out the interest rates to see if this would work.

Diversify your Assets

In these crazy economic times, don’t put all of your  financial eggs in one basket. Diversify!  For example,
one of our esteemed American financial institutions played a big part in wrecking havoc with Britains’ economy.  Londoners lost their high paying financial jobs which trickled down to other parts of society.  Some experienced London  investment advisors did not do what they preached.  When they received bonuses, they took it in stock options and other bank plans, instead of putting their money in other types of investments in different venues.  These people lost their retirement investments and life savings in one blow, along with their jobs.
Pick more than one financial institution for your investments.  I have done well recently in intermediate bonds.  I also keep some money in my bank, for easy access.  I am investing in a plan which has a multitude of stocks, to minimize risks, although less of my money is here.  I was shocked that one local bank only offers .10% on savings accounts, almost nothing.  Look to see if a bank now owns an investment house that you are considering for investments.  One bank that I loathe, bought out the one I was with, so I withdrew my money and found a much safer, higher paying  venue.  Another way to diversify, is with real estate.  It’s a buyer’s market now.  If you have the money to purchase an extra, smaller house, you can rent it out for years and enjoy the income.  Your house would eventually appreciate and you can sell it at a much later date.