0129: Stay at Home Mom (and Dad!) Divorce Advice

This was originally published on Divorce and Your Money here.  Is there any position more disadvantageous in divorce than that of a stay-at-home parent? Away from the workforce for a period, many women lack access to their own income to support a newly single status with kids in tow. The disadvantage is quickly apparent as the divorce process begins, so it is of critical importance to get organized as quickly as possible. The faster you can get your affairs in order, the more secure your financial future could look. With an overwhelming volume of tasks that need to be completed, where should you start as a stay-at-home parent? You will want to consider these six steps before you do anything else regarding your pending divorce.  1) Get your documents together. Documentation will play a large part in working through a favorable divorce settlement with your spouse. Attorneys, mediators, and certified divorce financial analysts may request any number of different documents to get a clear picture of your current marital finances. You want to make sure that you have copies of important documents that demonstrate your financial status, including: W2s and tax returns from previous years Income statements, including paystubs Bank statements Insurance policies Loan or mortgage details Investment accounts   If you plan to be the one to file for divorce, ensure that you have copies of these items prior to filing. Divorcing a controlling spouse could be a separate issue that will make obtaining these documents more difficult. To gain access to the information you need, you will need to come up with a ruse, such as preparing for a future health emergency.  2) Gain access to funds. It is no secret that divorce can be a costly experience. Hiring an attorney, a certified divorce financial analyst, a mediator, or any other type of counsel comes with a price tag. It is not uncommon for a stay-at-home parent to lack access to the marital funds, so a critical first step is finding a way around this problem.   When you lack regular access to your marital accounts, you may need to secretly stash cash  away from the eyes of your spouse. Sneaky methods include requesting cash back at the grocery store or storing it up on hidden gift cards; they may give you the financial advantage you need. You may also want to take advantage of learning about your marital finances while you can. Find a way to gain the most realistic picture of your current finances, whether you need to look at bank statements, tax returns, or anything you find lying around.   3) Craft a new budget. Chances are you have some idea about what your expenses are as a married couple. Mortgages or rent, utilities, phone bills, and all of the other necessities for daily life now need to be multiplied to reflect two separate households. The ultimate goal in this stage is to craft a realistic number and expectation for your monthly expenses. How much will you need to earn to make ends meet as a newly single parent? Remember, in all likelihood, child support will not cover all expenses or bills for the month, though it may offer some assistance.   4) Plan to return to work. This option seems like an unavoidable topic for stay-at-home parents who are awaiting the finalization of their divorce. Returning to work gives you access to your own funds, and it grants you the financial freedom to cover the expenses of caring for your children in your own household. Consider what your employable skills are, even if you have taken an extended leave of absence from the workforce. Update your resume with new skills learned, and start the arduous search for careers that could pay well and lend flexibility to your status as a single parent. What could you do to be more employable? You may want to investigate positions that allow you to work from home. If you have a degree from many years ago, you may want to consider taking additional classes to update your skillset. If you have already crafted a detailed budget, then you know what your expected expenses are at the end of each month. Allow this final figure to guide your decision to select the right career for the upcoming phase of your life. Do not forget that the benefits offered by potential employers can also play a role in your overall income. For example, these benefits could help replace health insurance lost from a spouse’s employer, or start a personal retirement fund. 5) Consider requesting temporary alimony. Long-term marriages that allow one to be a stay-at-home parent for an extended period of time may offer alimony on a temporary basis. This temporary alimony or short-term support can give you some financial breathing room while you search for gainful employment. It may also help cover a greater portion of expenses while you return to school and search for a long-term career and a new residence. Alimony is typically only granted on a long-term basis for spouses who were stay-at-home parents for a very lengthy period of time. After such a time period, a judge may declare that the stay-at-home parent is past the point of being able to learn new skills or find gainful employment outside of the home. 6) Get yourself organized before you begin. Entering into the workforce and creating a new household when you have been a stay-at-home parent for years can be chaotic and stressful. If you are the one preparing to file for divorce, you need to ensure that you organize yourself as quickly as possible. Have you had time to prepare, or have you been blindsided by the news of divorce? Either way, organization is a key component to establishing financial security moving forward. Do not allow yourself to be swept up in the emotional aspect of your divorce. You will need to begin preparing and organizing for the upcoming ordeal as you separate one household into two. Sooner rather than later, start considering what you would need to do to care for your family as a single parent.   Shawn Leamon, MBA, CDFA is the host of the “Divorce and Your Money Show” and Managing Partner of LaGrande Global, with offices in Dallas, New York and Hanover, New Hampshire.