Help! I'm Getting a Divorce! (Soledad Says #1)Jan 08, 2022
Dear Nervous Mami,
Thank you so much for reaching out! During challenging times, it is natural to become overwhelmed with the discomfort of change that we can forget how much agency we still have in our lives. The fact that you were able to notice that you are feeling nervous about your financial security and sought support is a testament to your problem-solving skills and resilience.
I actually got into personal finance after reading a Dave Ramsey book. I learned about zero-based budgeting from him. Yet, I wondered whether it was possible for us to change our financial trajectories from a place of cariño instead of shame. I've learned from my own personal journey and from working with clients that it IS possible to build wealth from a place of amor, excitement, and joy.
Your fear and nervousness about your financial future have served you. They motivated you to reach out for help but I don't want those emotions to continue to drive your financial journey. Our bodies can only handle so much adrenaline and cortisol before they start to take a toll on our physical health.
So with that in mind, I want you to look through your budget and identify the ways that you are currently investing in your self-care, health, and joy. Are you intentionally spending money to support your mental and physical health? You may need to increase your spending on individual therapy, family therapy, ordering food, exercise equipment, audiobooks, massages, etc. Only you know what type of purchases bring you comfort, please view those purchases as investments in your well-being.
If possible, you may want to increase contributions to your Flexible Spending Account (FSA) or Health Savings Account (HSA) to pay for the rise in your health costs with pre-tax dollars. This will reduce your taxable income and may result in a higher tax refund next year.
Talking about taxes, keep in mind that your tax-filing status may change. You will need to decide whether you will be filling your taxes in 2021 and 2022 as "married filing jointly" or "married filling separately." Filing separately, can impact your ability to save for retirement in an Individual Retirement Account (IRA) especially your contributions to a Roth IRA. You can read more about that here.
This is important information to know because one way we can grow our dinero is by investing it in the stock market. In order to do that, you have to (1) select a brokerage firm, (2) choose an investment account, (3) contribute dinero into the account and (4) buy assets. Your tax-filing status can impact what type of investment account would be best for you to use to grow your dinero. Since I want you to learn more about this, I'm going to send you a link to attend my webinar called "The Four Steps to Investing."
During that workshop, I will teach you about the accounts you could open to ensure you have enough dinero for retirement and also how to invest for your kids' future in a 529 plan, Coverdell ESA, UTMA account or UGMA account.
However, before you start focusing on making your money grow make sure that you have enough of a safety net. Now that you are financially single with dependents and with a job that is in high-demand, you want to have at least 3 to 6 months of expenses saved in a high-yield savings account. This emergency fund is going to help you avoid relying on credit cards when unexpected expenses arise. We want you to avoid incurring high-interest debt so you have more dinero to invest.
You are going to become financially secure. Your kids are going to become financially secure. I believe in your ability to build wealth poco a poco, amor because you are increasing your financial literacy.
Just keep reflecting, learning, and taking actions that are aligned with your financial goals. And if you ever want to work on your goals conmigo, use this link to get started.
Sending you besos, abrazos, y mil pesos,
P.S. There are some financial benefits to being divorced, read this article to learn about them!