No matter where you turn these days, news broadcasters, financial pundits and market watchers are talking about the Federal Reserve and what they will do with interest rates. Will they continue to increase rates or become more accommodative and slow down their increases? Since the 2008 financial crisis, the Fed has raised rates eight times (once in 2015, once in 2016, three times in 2017 and, so far, three times in 2018). What will happen next?
Atlanta Financial Blog
Change in Marital Status, Change in Lifestyle?
Divorce brings many emotional losses, and often a sense of loss of control over the future. A common response is to cling to elements of your past lifestyle. Many parents understandably fear the impact a divorce will have on their children, and want to keep their lifestyle as much the same as possible. But often, holding on to the past can often come at a high cost. I have seen parents insist on their children continuing to attend expensive private schools that are no longer affordable for either parent after divorce. Many women in particular, make staying in the marital home their top priority, even when the housing costs no longer fit into their post-divorce budget. Often these choices mean that the financial future of one or both parents are compromised. Funds that should have been invested and growing to provide for retirement are eroded, savings reduced or eliminated, and the financial future more bleak than it needed to be.
Remember that divorce inevitably means change for both parents and children. Lessons learned through the process can be life-changing, but not necessarily in a bad way. Children can learn valuable financial and budgeting skills that will help them later in their adult life if allowed to participate in family decisions in an age-appropriate way. And often the fear of change is far worse than the actual change.
In my own family, I rashly promised my children that we would not leave the marital home for at least two years to try to “soften” the impact of the end of my 31-year marriage. I knew better, but was overwhelmed by a desire to ease my children’s suffering. In a few months, I realized that maintaining that home was not a healthy or financially-wise decision, and had to back-track from that promise. As you would expect, my children initially resisted the idea of leaving their childhood home. All they could see was “loss.” Once I involved them in the house-hunting process, they quickly got excited about a new and different location. And, when we found our current home, their emotions quickly transitioned from loss and fear of the unknown to excitement about new possibilities.
Even if your children aren’t initially “excited” about such a change, you owe it to yourself and your children to be sure you are on a financially sustainable path. That is the greatest gift we can give our families.
An estate plan is a map that explains how you want your personal and financial affairs to be handled in the event of your incapacity or death. Due to its importance and because circumstances change over time, you should periodically review your estate plan and update it as needed.