A Man Is Not a Plan… or is it?

By Jackie Ramler, Financial Specialist.

I had a recently divorced client move their account to me because the prior broker said to them, “Don’t worry about the money, you’ll get married again and your new man can take care of you”.  The suggestion was that ‘A Man is a Plan’.  Needless to say, the message that the client received was that they couldn’t figure it out on their own.

For those of you that gladly let their spouses handle the finances, it is time to take hold of the financial reigns.  Managing your finances does not require advanced math- basic addition and subtraction is all you need.  The fundamental law of managing your finances is that you can’t have more expenses than income- otherwise you go into debt and risk losing what you have.

You need to have a realistic idea of what you have to spend.  Take a close look at your paycheque and see what you really make, after taxes and expenses.  If you receive spousal support then you need to set aside a portion of that payment for taxes.  If you disregard this advice, and you spend it all, then you may have a tax bill.  Nothing is worse than owing money to Revenue Canada.

The next step is to take a look at all of your expenses and break them into 2 categories- Needs and Wants.  Your needs are food, shelter and necessities to survive.  The wants are all of the extras that you could survive without.  Be clear about what you have to have to survive and what you can live without.  I once met with a couple that were having debt challenges and I noticed about 6 magazine stacks of current magazines.  When I suggested that they consider letting go of those subscriptions, the one spouse reacted as if they were a necessity.   This unrealistic ‘need’ was contributing to their debt problems.

Only you can make the value decisions around what expenses you maintain or let go of.  If you find this a real challenge, then look for a financial professional that can assist you. Either way, invest a bit of time and you can manage your finances so that you aren’t dependent on another to take care of for you.

Jackie Ramler, Financial Specialist, Divorce Choices Inc. www.divorcechoices.ca

Most people want to continue to live in the same kind of neighborhood, take the same kind of vacations, and have the same lifestyle as before. This is possible, but it means that you need to either make more money, sacrifice on other items, or go into debt. Debt is just spending tomorrow’s income, and can only go on so long before debt becomes a burden that can take you even lower in your lifestyle.

So, how do you make this transition? The first step is to acknowledge the financial reality that your lifestyle will change. Denying this reality just delays the inevitable. Next you want to take a realistic view of the resources you have. Once you know what kind of after tax income you will have, then you want to start putting together your ‘spending plan’. How you are going to prioritize spending the income you have is a reflection of your values. You want to start with listing your needs, and then start filling in your wants.
Needs are the basic expenses- food, shelter, transportation, and clothing. Wants are the extras – entertainment, gifts, vacations, etc. Only you can make the tough decisions about what to cut, if you are spending more than what is coming in. You can either scale back on the expense of the needs, or you can cut back or eliminate some of the wants.

You can approach this as a challenge, or you can embrace it as an opportunity. Your attitude drives how you will make this transition. Here are some ideas that you can use:
1) Get your children involved, this can help them understand how to manage money.
2) Make a list of all the fun things you can do as a family that are free or cost very little.
3) Create family ‘money rules’ and prioritize your family’s values around money.
4) Brainstorm all the ways that everyone in the family can cut costs, such as turn off the lights when not needed.
5) If you have young children, consider buying their clothes at the second hand stores, such as Value Village.
6) Need a new TV or other item, consider buying used.

You can make this financial transition, but it may mean some tough decisions. If you are still having trouble making your spending plan work, consider consulting a financial planner or money coach for assistance.
Jackie Ramler, Divorce Financial Specialist www.divorcechoices.com

So what can you do to get ready?

1. Before entering into negotiations you want to acknowledge what emotions are big for you.
2. Ask yourself three questions; How am I feeling about the marriage ending? How am I feeling about splitting everything? How am I feeling about all the changes in my family’s lives?
3. Write a list of the emotions that come up and rate them are they positive or negative.
Positive emotions make you feel light. Negative emotions make you feel heavy.
4. Next rate the emotions on a scale of one to ten. Any negative emotions that you rate five or higher, you need to be worked through before you go into negations. Any positive emotions that are five or lower you need to increase before you negotiate.
5. Create a strategy to increase or decrease the emotion.

So a list may look like this
Relief + 4 Think about the stress I do not have to live with anymore
Guilty - 8 Write a letter to myself that helps me forgive myself
Sad - 7 Remember this is normal and dedicate sometime to just be sad
Afraid - 5 Write a list of how the Collaborative team members will help
Angry - 7 Work with the Family Coach to decrease this
Hopeful - 4 Create some new rituals and new ideas for our futures.

It is important to remember that you are going to be emotional, that is normal. The emotions have to be manageable to the point where you are able to think during negotiations and come up with viable solutions. This process is generally hard but definitely important.

Written by Sue Cook MEd Counselling, BAFN, CYC RSW, CCC
www.familytlc.ca

It is important that accurate income is determined as this is used to properly calculate both child support and spousal support.  In addition, accurate income figures are important when calculating the proportionate sharing of your children’s extraordinary costs, such as daycare, extracurricular activities, uninsured health care costs and post-secondary education costs.

In an effort to acknowledge and account for these personal expenses you will want to go through your business return and identify what items are for personal use, or may also be used for personal benefit.  Taking this approach is fair and expected in the separation process.

For example:

You may have a vehicle that you use for business, but unless you always leave it at the business and do not use if for personal trips, you more than likely also use it for personal trips.  You will want to look at what proportion of the week’s travel that you use the vehicle for personal use.  You would then look at vehicle expenses and take that proportion of personal use and add it back into your net income.

Here are some common items that I look for when evaluating these expenses:

-          Cell Phone

-          Vehicle

-          Family vacations and trips taken though the business

-          Personal property owned within the business

-          Family meals put through the business

The other advantage business owners have is that you can often Income Split with your spouse, even if they are contributing very little to the business.  In this case you would acknowledge that and add that income back into your income for family income calculations.

It may be important that you understand that the professionals you work with do not report any of this information to Revenue Canada and it is kept private.  Privacy is yet another advantage of the Collaborative approach to separation/divorce where you agree to not go to court to settle the issues of your family’s separation.

Please note that there is no obligation to equalize your and your spouse’s incomes.  Only in longer term marriages is income equalized- and this does not necessarily mean equal.  The spousal support advisory guidelines provide for taking into account taxes paid and benefits received.  Even if spousal support is paid, the person paying the funds out usually ends up with more income due to tax savings. 

Taking a fair approach to the finances and all family issues is a cornerstone to the Collaborative divorce process. 

Jackie Ramler, DFS, CDFA, CFP, FMA, MBA

Divorce Financial Specialist

Divorce Choices Inc.

www.divorcechoices.com

Written by Sue Cook

Perhaps you are separating or already split up and you have children. You and your child’s other parent both want to be actively involved in raising your kids.  Each of you wants to continue to see your children regularly, help them with the day to day aspects of life, keep your kids safe and contribute to their wellbeing. When both parents want this kind of regular involvement in their children’s lives we call that co-parenting.

 Co-parenting means that you and your ex are going to have to work together while living apart. For some this is simple and smooth but unfortunately for many this is extremely difficult. Some of the reason why this is so difficult is because one or both of you are:

• Angry at the other parent
• Afraid of being devalued in the children’s lives
• Coming from a place of unhealthy co-parenting in the marriage
• Worried about the parent child relationship breaking down
• Lacking trust in the other parent
• Adamant about how the children should be raised
• Controlling

These concerns generally feel very real and very important so it is quite common for you and/or your ex to become non cooperative and inflexible. The co-parenting becomes a chess game of strategy and a power struggle. The sad thing about this is when two parents cannot work together but both want to be involved the children suffer. Ongoing conflict between parents is a big stressor for children. It causes anxiety, loyalty bind, and other distress signs and symptoms in children.

Co-parenting that works well and does not cause stress for the children occurs when parents:

• Feel secure in their relationship with their child,
• Value the other parent role in their child’s life
• Are flexible and cooperative
• See the benefit of different parenting styles
• Understand and respect the parenting boundaries from one household to the other
• Respect the rights of the children and know the responsibilities of parenting.

This list may seem impossible when you think of your ex as your ex. However if you are able to shift and see your ex as the children’s other parent who not only loves the children but values you then co-parenting can work.

A. The children

B. The emotional transition

C. The money

D. The legal issues

While I would have thought the children would score highest, surprisingly 98% of the +2200 respondents reported MONEY as the number one issue for them. If we think about it, having enough money goes to the root of most people’s fears- they don’t want to be homeless, or they don’t want to live in their parent’s basement forever. Having enough money also supports the quality of the life that they can give their children. Money goes to the root of our identity and how we spend money reflects our individual values.

But the reality of divorce is that the total family income that supported one household, now has to support two households. The mistaken idea that you should have the same standard of living as when you were married, is just that- mistaken. Simple math tells us that you are likely to have around half of the family income, post-divorce or separation. The sooner you come to understand this sad reality, the sooner you will be able to better negotiate the financial aspect of your separation agreement.

Money discussions in divorce and separation are not often really about the money. Since we understand that anger is an expression of fear, collaborative professionals are very good at getting to the core concerns of each party so that cooperative solutions can be found that meet both spouse’s needs. A collaborative team is your best support for ensuring that your separation agreement negotiations move through the emotions that come up around your family’s financial security.

Jackie Ramler, Divorce Financial Specialist

www.divorcechoices.com

I know how disorienting it is when I have lost my ability to trust someone who I used to trust implicitly. I feel like I don’t know the person any more. I don’t know how they will respond and what is the truth in our relationship.

Equally uncomfortable is when someone no longer trusts me. I feel frustrated and want desperately to repair the relationship and the loss of trust.

Have you had a loss of trust in your relationship? Maybe an affair took place. Maybe you just feel that your spouse has given up on the dream you once shared so now you feel you just can’t trust them. Maybe you feel like you and your spouse have done and said so many mean things to each other that you have become like strangers to each other – and strangers can’t be trusted.

Some of our clients decide they should just go to Family Court because they don’t trust their spouse. The problem with court is that it can’t ensure your spouse will become trustworthy again. It won’t necessarily solve the breach of trust. The problem with going to court is you are giving up the power to make decisions about your life to the judge. Court is slow, costly and the results are often difficult to predict. Often, the court process itself increases the animosity of the parties. Court is the place of last resort. Court won’t solve the trust issue.

As a result, I thought there must be a better way. How do we build sufficient trust that our clients can negotiate rather than go to court?

I come across some interesting research that suggests there is a way to build sufficient trust so that you and your spouse can negotiate an agreement and avoid court. It is called using Confidence Building Measures. Essentially, what that means is offering unconditional and unilateral gestures of goodwill so that your spouse is willing to see you are genuine about wanting to negotiate a deal.

Working with a Collaborative professional, you can develop and offer your own Confidence Building Measures so that you and your spouse can engage in negotiations. You won’t “save the marriage” but you can build sufficient trust that you can avoid the pain of the court process. We can help.

Family law views family assets and income as family property – irrespective of who earned the income or built the wealth. This property and income is to be shared in the separation. The system recognizes that the primary wage earner is often allowed to focus on their career or business while the other spouse takes primary care of the home or the children. The primary wage earner is often not called on to take the children to their dentist appointments, be home for the repair person, or other obligations during otherwise ‘work hours’. This is often taken for granted by the higher wage earner and they do not often appreciate the sacrifice the other spouse has made.

We have termed this person a naïve realist. Either you might be reading this and it is sounding familiar to your perspective, or this could describe your spouse that you are trying to negotiate with. Either way, there are ways to assist the naïve realist to gain a better understanding of how the system works.

While this naïve realist is often well educated and quite logical, it is challenging for one professional to assist them in seeing reality. Working within a collaborative team of professionals is very helpful for this person to hear the same message from all of the professionals. When each of the lawyers, the financial specialist and the family specialist are consistently giving the same message, then this helps them to suddenly ‘hear’ the reality of their situation- they have to share. Working as a team, we also use other methods of helping the naïve realist to gain insight and understanding so that they can move forward with realistic expectations. The last thing we want to see is for the naïve realist to not get the reality message and try to go off to court for a solution- where they will be sadly disappointed and it will cost them considerably.

If you know a naïve realist and need help with strategies in how to work with them, give a collaborative professional a call today.

Have you ever had a client become so angry they couldn’t

think straight? Or so frightened they just ran away? Or maybe they were frozen
with fear?

You may be saying “Seen it? I’ve live it!”

Me too. We’ve all been there. I remember being so angry the
hair on my body stood on end and I just wanted to hit somebody. I was incapable of negotiating and just wanted to fight.

This response is called the Amygdala Hijack. The Amygdala is a part of your brain that protects you when it senses you are under attack or you
are threatened. It shifts you into “fight, flight or play dead” mode. In fact, it sends hormones to your “rational, thinking” part of the brain so that it
becomes disconnected. It feels like you can’t think straight for good reason - because your brain won’t let you.

The rational part of the brain used for making judgements, considering the consequences of decisions, building relationships and thinking rationally is called the Prefrontal Cortex. We need it to negotiate but when your client is suffering from an Amygdala Hijack, the Prefrontal Cortex is shut down.

As a professional, you can help your client recover from an Amygdala Hijack by taking three steps:

1) Name the threat. Ask if your client if they feel a threat to their sense of status, autonomy, certainty, relatedness
or sense of fairness? For a good article explaining these threats go to http://www.your-brain-at-work.com/files/NLJ_SCARFUS.pdf

2) Normalize the threat. Let your client know that the way they are feeling is normal.

3) Diffuse the threat. Offer your client another perspective so that they can see that the threat is not nearly as
dangerous as they first thought it to be.

For example, if your client hears that their spouse wants
full custody of the children with minimal access to your client, they may
become angry and upset. They may be suffering an Amygdala Hijack. You might
respond by saying “Are you feeling your status as a parent is threatened?”

Remember you might have it wrong. Maybe they feel threatened
by the uncertainty that this news introduces to their life. Maybe they feel
their sense of autonomy is threatened by their spouse wanting to impose a resolution
on them. All you can do is offer guesses why your client is feeling threatened
until you get it right. You’ll know you have the right threat named when it
resonates with your client.

Step two is to normalize their feelings by saying something
like “I totally understand why you are feeling upset and angry. Any of my
clients hearing this news would be upset. It is totally normal.”

The last step is to help diffuse the threat. You might say
“Just because your spouse wants sole custody does not mean that that’s how this
issue will be resolved. You will have a chance to put your position forward and
we will discuss it. Together, we will find a resolution that works for both of
you and is best for your children. We can work it out.”

Amygdala Hijacks happen all the time. They may happen at
four or five way meetings, when you are meeting with your client alone and
especially when the clients are together without professionals present. Even
you, the seasoned professional, might be triggered during the Collaborative
Process and suffer an Amygdala Hijack. They are a fact of life especially when
clients’ lives are turned upside down by divorce. Educating your client about
the Amygdala Hijack will help them understand and control their responses to
threats.

Using the three step process I described earlier will enable
you to help support your client through a hijack. Give it try…before the fists
start flying.