I was reminded how we can all get “stuck” emotionally when it comes to money when I read this post on the Vibrant Nation community from one of our employees about housing costs she is facing with her 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 am the boss she is talking about in the post and I agree with her version of the story. 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. It’s important to really listen and find the right moment and the right way to answer their questions with helpful financial information.
Also, often what people are asking is not necessarily what is concerning them most. In this case, I realized that Cara’s concern about housing costs were to a great extent about how to cover those costs plus the help paying some medical expenses that she felt she needed to give to her ex for six months after the divorce (which she explains in her post).
As Cara notes in her post, I told her that 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. I know her situation well, so I felt comfortable giving her that number as a ceiling. That helped her decide 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, in light of her very valid concern about stretching too far, it would make sense to ensure that her financial help to her ex also 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.