When it comes to money, we often get “stuck” emotionally, like a recent client who was finding it hard to deal with decisions like housing costs when facing a pending divorce. She explains:
I’m a grown woman and I’ve held a job all my life – but ludicrous as it may seem, I haven’t been able to wrap my head around the most basic questions, like: Where should I move? What kind of place can I afford? Should I pay more per month for a shorter lease, so I have flexibility to move and make a fresh start elsewhere, if I wish, sooner rather than later?
I’ve learned that when people come to you for advice about their divorce, it’s sometimes difficult for them to hear and accept that advice at such an emotional and challenging time in their lives. Often, when people ask questions about money, what they are asking is not necessarily what is concerning them most. Our client was also worry about support payments she might need to pay to her ex.
Many advisers and experts say that housing costs should not exceed 40% of your after-tax income, that 25-35% is a more comfortable range for most people. Our client decided that she did not need to go into a lower cost place that she really does not like. It also helped her decide how much more she would want to spend for that really “cute” place that inspires her. In either case, she has no interest in stretching herself so far as to hamper her ability to begin to rebuild financially.
I also suggested that she limit any support to her ex to fit under that ceiling. A simple idea. More prudent than scientific. Experts could debate whether she could afford more or less, how and why. But I made the suggestion because I knew she wanted to be “un-stuck” and it worked. She is going to pay whatever she decides to pay. That’s her business. But this simple information takes at least the emotion around over-stretching away, and — as she says — she can move forward.
Money is emotional, but simple, relevant information can help you sort those emotions out and empower you to get on with your life.
Being comfortable with your financial decisions is such an important part of all of it too. If you feel you’ve made the right choice for you – especially if it goes against “expert” advice – it’s much easier to get unstuck and move forward.
I’m going to keep this “stuck” problem in my mental checklist for when I’m making my next big financial decision. For me, this takes the form of dithering and endlessly weighing my options. It’s a great mental image also – pulling myself out of a rut and moving ahead.
Thanks!
Oh, I understand that question! I racked my brain over and over, running numbers for so many different scenarios; I wanted to make sure I had looked at every angle before I signed the papers. When you are on your own – you need to be able to stand on your own two feet. Something that can be terrifying after divorce. My decision was based on both emotion and sound finances. I wanted to be neighbors with a really good friend, and I wanted not to be house-rich, cash-poor. I found the perfect home that fit both criteria. That home, in that neighborhood, allowed me a place to heal and to move forward.