Her Safety Net

A divorce can expose one truth faster than almost anything: if you don’t have cash you can access today, you don’t have real options tomorrow.   In this episode, I share the idea that has been living rent-free in my head since hearing Jean Chatzky talk about it on Her Money: “her safety net” a personal, liquid account in your name that exists before you ever need it.

I walk through why this is not just an emergency fund for surprise expenses. A safety net fund changes how you make decisions at work, at home, and across the divorce table because it reduces panic and protects your ability to say no. You’ll hear a story from my professional experience about how short-term cash pressure and growing credit card debt can push someone to accept a long-term divorce settlement that isn’t truly fair, even when marital assets will eventually pay the bills.

If this resonates, take one small step tonight, then subscribe, share the show with someone who needs it, and leave a review so more women can find financial clarity when it matters most.

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Transcript

Welcome And What Rich Means

SPEAKER_01 0:08

Welcome to the Divorce Rich Podcast. I'm your host, Jackie Ressler. I've been a certified divorce financial analyst for 28 years, helping clients and their attorneys navigate the often complex and confusing financial issues in divorce. If you're in the process of or considering divorce, now is the time for you to take a deep breath and give yourself permission to find clarity on the financial issues you're facing. Rich means many things to many people. I believe the best definition of being rich is someone who has access to many resources. Along with my guests on this podcast, I will be bringing you a wide variety of information so that you can make sound and informed financial decisions for your financial future.

Sponsor Message And Disclosures

SPEAKER_01 1:08

Hey, if you're recently divorced or still in the middle of it, you already know life can feel like it's been turned upside down. And let's be honest, the financial part is overwhelming, confusing, and often the last thing that you want to deal with. That's why I want to tell you about the independent wealth management team at the Center for Financial Planning. Their team of certified financial planners specializes in helping people just like you navigate life changes with confidence. Whether it's assessing your new financial circumstances, creating or updating your retirement plan, or helping you adjust to the new normal, they'll work with you to get a clear, customized plan to feel in control and move forward with confidence. So if you're interested in working with a financial planner, you can trust to have your best interest in mind. And you're ready to take the next step. Visit centerfinplan.com at centerfinplan.com and schedule a conversation. Center for Financial Planning.

SPEAKER_02 2:12

Live your plan. Disclosure. Securities offered through Raymond James Financial Services Inc., member FENRA, SIPC. Investment Advisory Services offered through Center for Financial Planning Inc. Center for Financial Planning Inc. is not a registered broker dealer and is independent of Raymond James Financial Services. Center for Financial Planning was a sponsor of the Divorce Rich Podcast. The Center for Financial Planning and Raymond James are not affiliated with or endorsed by the Divorce Rich Podcast.

SPEAKER_01 2:48

Hi everyone,

Why A Safety Net Matters

SPEAKER_01 2:49

and welcome back to the Divorce Rich Podcast. I'm your host, Jackie Ressler, certified divorce financial analyst. And today we're talking about something that has been living rent-free in my head since I listened to a recent episode of Her Money with Jean Chatsky. I have to tell you, I am a genuine Her Money fan. If you're not listening to that podcast, stop what you were doing after this episode and go find it. Jean Chatsky has been one of the most important voices in women's financial empowerment for decades. And her show reflects that every single week. So I was listening to a recent episode, and something she said just stopped me cold because I have seen exactly what she was describing play out in real divorce cases, sitting across the table from real women, looking at real numbers. And I thought, I have to bring this to divorce rich. Because on this show, we don't just talk about financial empowerment in theory. We talk about what happens when you didn't have it in the most financially vulnerable moment of your life. So today we're going to talk about her safety net. I changed the wording a little bit to make it more, a little bit more PC, but it is the same topic that Gene covered, and I'm going to link in the show notes here. That's the account that every woman should be building quietly, deliberately, and before she ever needs it. Because a safety net only works when you already have it before you fall. Now, here's what I know as a CDFA. The women who come out of divorce in the strongest position always have had one thing in common. And the women who struggled the most during the divorce almost always had one thing in common, too. Today we're going to talk about what that is, why it matters, how to build it, how to talk to your spouse about it. And this one is really close to my heart. How to make sure our daughters never find themselves without one. This is her safety net. Let's get into it. So,

Emergency Fund Versus Safety Net

SPEAKER_01 5:02

what is a safety net? A safety net is not built again after you fall. It's built long before. This is not your emergency fund. That's for the broken water heater or your car repair or an emergency root canal. The safety net is different. That's the fund that gives you options. The difference between staying somewhere because you want to and staying because you have no choice can often be a safety net. Financial safety nets don't just catch you when they when you fall. They change how confidently you walk the wire every single day. Why acrobats don't perform without a net and why women shouldn't live without one either, is because the net gives us confidence to make decisions, knowing that we have something to fall back on if our current job, our current relationship isn't working, that we know internally that we are not financially stuck. So I'm going to share some things in this episode that I've seen professionally that will make this very real very fast.

Heidi’s Story And Cash Pressure

SPEAKER_01 6:12

So I'm going to tell you about a couple different stories. I'm going to tell you about a woman that had a financial safety net. I'm going to not use real names, and a woman that didn't have a financial safety net. Uh financial independent financial depend dependence doesn't feel like a trap until the door closes. Sometimes a controlling spouse will use money to try to manipulate their the uh the spouse that doesn't have control over the money. So I'm gonna tell you a story about a client whose name was Heidi. Of course, that was not her real name. But in Heidi's situation, she didn't have any of her own money set aside. And while the divorce, when the divorce started, she didn't have any money to her name. She had to open up a credit card to pay her legal fees, which was okay for her to do that. She went out and she opened up the credit card. And she only had a certain limit on the card. And her attorney said, No problem, we're gonna enter what's called a status quo order for you. And the living your general living expenses will be taken care of while this case is pending. And they did. So the mortgage was paid, the real estate taxes, the utility bills, um, all of her basic living expenses were paid, but that credit card debt kept building up because she didn't have access to any money for discretionary spending. So things like going out to dinner with her friends, if she needed a break, a mental break from what was going on with the divorce, she didn't have any way to do that. She couldn't do the typical things that she had been doing during the marriage, certain hobbies, she didn't have access to any money. So she kept building up credit card debt. And as we got closer and closer to settlement, that credit card debt got very, very, was very large. She was maxed out. It impacted her credit score. And she was in panic mode. And we were getting very close to the end of settlement. And her husband knew that she was in panic mode about the short-term cash flow. He didn't need to worry about short-term cash flow because he had a job. And his job, his paycheck, was taking care of all of his discretionary expenses. And even though my client Heidi knew that her credit cards were eventually going to be paid with marital assets, the stress of having those credit card debts creeping up higher and higher and higher was really getting to her to the point that she said, she reached a point where she said, I just can't keep arguing about all of these bigger things. I need to be done with this. And her anxiety started to build up. And so she finally agreed to a long-term settlement that really wasn't in her best interest. And the reason why she did that was because she was under so much short-term pressure with not having access to cash. And if she had had a safety net, an account that was all hers to take care of, all hers that she had been putting money into and that she had access to, I like to say that in your safety net, you should have three to six months worth of living expenses set aside in an account in just your name. That's her safety net for women. Three to six months is three to six months worth of living expenses. And that is something that I believe wholeheartedly. And in this particular situation in real life, if my client had had access to a safety net, she wouldn't have felt that pressure of not having access to any discretionary funds while the case was going on. And I have seen this again and again in cases. That stress of seeing debts build up, even if even when you know they're going to be paid off with marital assets and you're going to have enough money to pay the bills later, that daily stress pushes you to a point sometimes where you want to make an agreement just to get things done with. So that is what we don't want to have happen as women.

Talking To Your Spouse And Red Flags

SPEAKER_01 10:09

Okay, let's talk about the conversation that nobody wants to have. So you are already married and you decide, you listen, let's say you listen to this episode or you talk to a friend, and you decide, yeah, it's about time for me to have my own bank account that I have access to, whether I'm working or not, that this is something really important to me. The conversation that you need to have then is with your spouse. So, and the way that you would want to frame this with your spouse is explaining that a safety net actually protects the marriage as much as it protects you. It protects the marriage because both of you feel like you are equal, equally choosing to be there, not that you feel like you have to be there because if you're not there, financially you're going to be destroyed. Um, it is a financial responsibility. If for no other reason, let's say that your spouse has been the one handling all of the money, and your spouse becomes disabled. Let's say something happens suddenly, they have a medical issue that you weren't anticipating, and now you don't have access to any money to pay any bills to keep things afloat. This is not healthy for any marriage. Every financial advisor worth their credentials will recommend individual accounts for each spouse. Healthy marriages have two financially independent people who choose to be together every day. So let's say that you tell your spouse what kind of reaction should you be looking for? A supportive spouse's reaction looks like this. Great idea, honey. I think that you should have access to some money in your own name. If something were to happen to me, you need to have access to money. That's what a supportive spouse looks like. A controlling spouse's reaction might sound something a little bit different. Um, and why that reaction is something that you should pay attention to is what I want to talk about next. If the conversation feels dangerous to even have, that really tells you everything you need to know. These are the red flags that I would look for. Anger or suspicion at the mere suggestion that you want to have access to some of your own money. Demanding access to or knowledge of the balance and where the money is being spent is another red flag. Using guilt as a weapon, money used as control within the conversation itself, in terms of, okay, let's talk about how much you need, justify to me why you need that amount and what that amount is specifically going to be used for. I've had clients that have told me that their spouse monitored their spending to a incredibly detailed rate. I had one client years ago, I will never forget it. She told me her husband had created a spreadsheet for her when she went grocery shopping. And she was allowed to pick all of the items on her massive Excel spreadsheet, but she was not allowed to get a different brand of anything or veer off of the list in any way, or she had to account for it with him. Anyone that's using money as a weapon against you this way is not a healthy place for you to be, and a really good flag for you that yes, I do need to have access to some of my own money. Again, a spouse who doesn't want you to have a safety net is telling you exactly why you need to have a safety net. So this is a really important conversation to have. And again, I would say in a healthy relationship, what we're striving for is financial equality. And that means that there are times when it might be important for you to feel like you have your own money, not because you want to get a divorce necessarily, but because you want to be in control of some of your spending decisions. You want to be in control of aspects of your life that are going to impact you. And also, if you do end up being in a situation where you may get divorced or you're unhappy in the marriage, people feel different when they have an account with money in their own name. And I'm again, I'm not suggesting that anyone hide an account. Um, in in my state, as I'm assuming in most states, I'm in Michigan, but in Michigan, if you hide an asset during a divorce and the other side finds out about it, they might be entitled to 100% of that asset that you hid. I'm not suggesting that you hide an asset. I'm suggesting that you advocate for yourself during your marriage, or what if you're in a partnership, and you explain why you have the need for an account in your own name that only you have access to and control over.

Sponsor Message From Divorce Attorneys

SPEAKER_00 14:54

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How To Build It And Where To Keep It

SPEAKER_01 15:39

Okay, let's talk specifics. So again, at the beginning of this episode, I said every woman should have three to six months worth of living expenses in her name in an account that she has access to that is liquid. Um, I'll tell you what though, even one month of expenses can make all of the difference in the world for you if you ever are in a situation where you need it. Um, what are some ways that you can start an account like this? You could have, if you have side income or a side job of any kind, you can talk about putting that money into your account. Um, you have a legal right as a spouse to marital funds for individual savings. So any asset that accumulates during the marriage, no matter whose name it's in, is a marital asset. And so you could just take money out of the marital estate, out of your joint bank account and say you'd like to put aside a certain lump sum, or if there isn't availability for that within the finances of your marriage, that you want to put aside a certain amount every month, whether it's $50, $100 a month, $250, $500. Um, any money that is gifted to you could go into that account. Any cashback and rewards programs, you could intentionally focus into your safety net account. This is what you should not do with this money. Okay. It's not money to invest. So I would not take this money and use this to turn it into you found the hottest tech stock out there, the best new AI stock, you or crypto, and you put the money in there and you're looking to make this money, you know, quadruple over time. That's not what this money is for. This account needs to be liquid, meaning that it shouldn't be invested in stocks. It shouldn't be invested in bonds, it should be invested in something that you can very quickly access that money without incurring taxes or any cost of sale. So that's really important. And any money that you need to access within three to five years really should be in very safe investment. So a high yield, a high yield money market account, a savings account, even a CD, that could be considered a safe and liquid place to put this safety net account. Another important thing, keep it separate. So it's an account that no one else has access to. This is your personal safety net account. You're not gonna give this account, you're not gonna give your kids access to it for their uh their nail treatment or their spending money, their DoorDash fund. This is your account only. And I'll tell you what, if you have children, by talking about this openly, you're setting a really great example for your daughters and your sons that you do this. This is an important thing to do, and it's not hidden. This is just something that everyone should have. And you want to keep it accessible. So again, you want to keep it in something that isn't high risk, something that isn't illiquid. Um, it needs to be money that you can access quickly if you need to. Um, you can take advantage of some of their apps and tools that you can download, apps on your phone that you can use to make that savings invisible or something where it just, you know, automatic transfer every single month. You don't even see it happening. Um, that's gonna make it a habit for you that you're gonna be able to maintain. The goal is not to think about it every day. The goal is just to have a fund there and that you know that money is there if you need it. If you're miserable at your job and you feel like, well, I can't leave my job because I'm so miserable, but I'm gonna need three to six months to look for a new job. If you have a safety net, you can reach that breaking point at your job and give yourself the peace of mind of knowing I don't have to stay here. I can go and change my job. Same thing with your your relationship, your romantic relationship. Whether you're married or you have a partner that you live with and you share expenses with, uh, again, you want to have access to your own money so that if you really did feel like, you know what, this is not good for me to be here anymore, even if you needed to get away for a weekend, you have money that you can use that you don't need to feel guilty about, that you're not taking away from the marital expenses and only you have access and control to. Think about how empowering that would be if every single person had their own safety net account like this.

Teaching Daughters Financial Independence

SPEAKER_01 20:15

Okay, for all of the female listeners out there and all of the male listeners out there, let's talk about our daughters. One of the most important steps that mothers skip, our parents skip with their daughters is an important conversation about money with your children, with your sons and your daughters. Sometimes our sons are getting this information from other places. So you need to start that conversation so much earlier than you think. You need to normalize financial independence from childhood. And what that means is setting an example again that you have your your own agency when it comes to handling money, that you are not beholden to another person in the relationship that authorizes you to spend money and that you have to run everything by. Um, it should start when your daughter or your son gets their first job. The first job we would talk, I think it makes a lot of sense to talk to your children about your very first job. You set aside some money for long-term savings out of that, some money for spending, and some money for the safety net. So I would recommend a third, a third, a third. So a third of the money goes into long-term savings, no matter how old you are. Starting earlier, the better. You can have the conversation about compounding interest, the that having that conversation with your children, a third, a third, a third of every dollar that they earn. Some of it goes into their safety net that they're going to maintain for their own financial independence. Um, let's say that you get to the point for your daughter or your son where they're moving in with a partner. That's another great. Turning point, another time to have that conversation and sit down and talk about how you are and your partner going to be handling joint financial decisions? How are you going to pay for bills? Have you talked about that? Have you talking to your children about having financial transparency with their partner, with their partner is so important. The most critical pre-marriage conversation that you as a parent can have with your daughter is about money and about having a financial safety net. The phrases that every daughter needs to hear is that love is not a financial plan. You know, women that say that they're, you know, they're in love, they're never going to get divorced, they don't need to worry about money, their spouse is going to take over the money, the handling of the money. That's not a sound financial plan. As a woman, sometimes our earning potential is the most important financial asset that we have. So we need to think about protecting that. Even when we have children, what are we going to be giving up in our financial ability to take care of ourselves by taking out those critical years in our earning potential to have children and raise children? I'm not saying that women shouldn't do that, of course, but it's important to always maintain your own financial foundation, no matter how much you love someone. Your marriage can't be your retirement plan. You always, always have to have your own safety net. Do you know who are the most powerful carriers of this message for your daughters? Women who have been through divorce. If you've been through a divorce, your daughter is watching how you came out of it financially and otherwise. That is your most powerful teaching moment. And even if you were in your divorce and you weren't financially aware, you didn't know about the accounts you had, maybe you didn't know about debts you had, that's okay. You need to use that as an important teaching moment for your daughter to explain why they need to always be aware of their finances. Before

One Account Tonight And Closing

SPEAKER_01 24:08

I end this recording, I want to come back to where we started. A recent episode of Her Money with Jean Chatsky planted a seed that became this entire conversation. If what we talked about resonated with you, go find her money and tell Jean Chatsky that I sent you. She's been doing this work for women for a long time, and she really deserves every listener that she gets. And if this episode hit close to home today, whether you are happily married, quietly struggling, or somewhere in between, I want you to do one thing before you go to sleep tonight. Open one account, just one, in your name only, at a bank your joint accounts are not at. And put something in it. Whatever you have, ten dollars, a hundred dollars, a thousand dollars. Because a safety net only works if it's already there and you deserve to land softly. This is the Divorce Rich Podcast, and I'll see you next time. Thank you so much for taking time out of your day to listen to Divorce Rich Podcast. If you like this podcast, please follow us on Apple or anywhere that you download podcasts and share this link with any friends or family that you think might benefit from this information.