No one gets out of life unscarred. There has, or will be, a conflict or trauma that happens in your life. It will knock you down, to the point where it may even feel like someone is standing on top of you, not allowing you to get up. There will be hard times.
Today, I wanted to focus on some of those unfortunate events that you, or someone you know have experienced or might face. These catastrophes make up just one chapter of your story, if you’re lucky. I’m talking about divorce, death of a spouse, or losing your job in a layoff. All three can play a role in the outcome of your financial picture. These situations are anything but rare, so it is imperative to learn how to be the hero of your story when conflicts arise.
Divorce will impact about half of married couples. The trauma that this can have on the couple, the children, and on other family members is oftentimes unmatched. However, this should not be a defining moment for you or your future. You are not the victim of divorce. Rather, think of yourself as the hero, as most heroes find their way into the plot when things get complicated.
The monetary cost of a divorce is about $15,000 per individual. The costs that aren’t shared in these statistics, are the costs of the mistakes that are made post-divorce. Assets might need to be liquidated per court order, or not, to make payments. Ensure that you know the taxable consequences. If your spouse was the higher income-earner during the marriage and you find yourself in a situation where you are receiving support monthly or in a lump sum manner, use these funds wisely and allocate them appropriately. Child support should only be used for expenses related to your children. Anything more than that might serve a different purpose. Seek professional help to ensure the right decisions are being made with this money.
In each married couple, there is likely to be one who spends more time picking apart the budget, entering the personal finances into spreadsheets, and might even be the “money saver” in the relationship. Heaven forbid something were to happen to your partner in crime, regardless if they are the money savvy one, or not. Take the time to educate one another on the finances that exist, the bills that are paid and where everything is located. Check out the infographic above for important ways to get organized in the event that your loved one be taken too soon.
The third and final “life event” is job layoffs. This should be addressed as it sure does throw a monkey wrench into one’s financial plan. With the 7.5M available job openings in the United States, a layoff doesn’t sound as bad as divorce or death. It is important to be prepared if layoffs strike at your employer. In 2019 alone, the following companies have let go of several hundreds and in some cases thousands of employees: Verizon, General Motors, Nationwide Insurance, Nissan, & MGM Resorts. Total job cuts have increased by roughly 10% from the end of 2018, and up over 35% since January 2018.
About one out of every 10 people will experience a job layoff in a year’s time. Should this happen to you, it is time to remind yourself that you are not the victim. Some things to do in this situation would be to collect your final paycheck, confirm that you know all of the available employee benefits (such as COBRA) as well as options with your retirement plan/pension, and start preparing for your job search.
Whether you loved your organization/employer or not, it doesn’t serve you to sit on a sinking ship with your hands roped behind your back, waiting for someone to swoop in and save the day. Heroes (like yourself), put on the cape, strap on the boots, and do the hard thing. That is the defining moment of your story.
https://www.statista.com/statistics/269959/employment-in-the-united-states/ (number of employed in US)
https://ycharts.com/indicators/us_layoffs_and_discharges_total_nonfarm (U.S. Layoffs and discharges, total nonfarm)Categories: Educational Articles