Divorce Diaries: Lessons From the Trenches
Welcome to Divorce Diaries, where host Cary Jacobson, attorney and mediator brings you real stories, hard truths, and practical advice on navigating divorce and family law. Whether you're going through it, considering it, or just curious, this is your place for clarity, confidence, and resilience.
Divorce Diaries: Lessons From the Trenches
EP #17: Financial Independence After Divorce with Guest Donna Cates, CDFA
Financial independence isn't just important during divorce—it's absolutely essential. In this powerful conversation with Certified Divorce Financial Analyst Donna Cates, we explore how women can take control of their financial futures while navigating the emotional and practical challenges of divorce.
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So what happens if the marriage ends? And I've worked with hundreds of women going through divorce. Even those that are just newly widowed and the ones that I find thrive post that life transition, are the ones who have taken ownership of their financial future.
Speaker 2:Welcome to Divorce Diaries, where attorney Keri Jacobson brings you real stories, hard truths and practical advice on navigating divorce and family law, Whether you're going through it, considering it or just curious.
Speaker 3:This is your place for clarity, confidence and resilience. Welcome back to Divorce Diaries Lessons from the Trenches. I'm your host, keri Jacobson, and on this podcast we explore the challenges of divorce and how to navigate them, with expert advice from professionals who have seen it all, and today's episode is all about financial empowerment. Meet Donna Cates. She is a trailblazer dedicated to transitioning women's financial futures. With over two decades of experience as a financial advisor, a wealth builder, certified divorce financial analyst, chartered retirement planning counselor and a divorce financial mediator, donna is steadfast in her mission to empower women at any stage of life.
Speaker 3:Donna's innovative approach challenges the historical inequities in women's financial participation. She creates customized financial plans considering diverse goals and roles, addressing everything from early career challenges in life's complex transitions. By championing the idea that a man is not a financial plan, donna fosters independence and confidence among women. Donna leads two successful enterprises Money Matters Wealth Solutions, where she addresses comprehensive financial planning and investing needs, and Navigating Divorce, which focuses on divorce financial mediation. Donna regularly conducts educational workshops for women, speaks at women's organizations and is a two-time best-selling author of Divorce Decoded a manifesto for women navigating divorce as well as Beyond the Financial Trendsetters, revolutionizing the role women play in building wealth. Thank you so much for being here, donna the role women play in building wealth.
Speaker 3:Thank you, so much for being here, donna. I'm thrilled to be here, keri, good to see you, welcome to the show, and I'd love for you to kind of share a little bit with our listeners about how you got started. You know a little bit about your background and why you decided to focus on financial planning and working with women primarily.
Speaker 1:I would love to share that.
Speaker 1:So this is actually a second career for me, carrie.
Speaker 1:And when I came into the financial planning investment management world, you know, back in the day we were doing a lot of seminars to educate people, and my focus at that point was on retirement planning, and I had a lot of men and women, typically in their 60s to 70s, that were attending these workshops. But what I found by doing those in-person events was that most of the people that approached me for advice and help were the women. So I determined very early in my career that it probably would behoove me to focus on working with women, and, interestingly enough, I discovered too that divorce attorneys were helping people get through the divorce process, but they weren't necessarily giving really sound financial advice to these women that they were working with. So that's when I got my certified divorce financial analyst designation and made a decision to really focus on working with women in transition, especially those that are divorcing, so that we could help them make more informed decisions as they were navigating the divorce process, and that's been my passion for 20 years.
Speaker 3:That's amazing, and tell us a little bit more about how you work with women who are going through that divorce process.
Speaker 1:Happy to talk about that.
Speaker 1:So, basically, when anybody is considering divorce, you know we automatically think of hiring an attorney, but there really is the need for a team and I'm not saying that you don't need to hire an attorney because everybody needs to be represented.
Speaker 1:However, you also need to have somebody that can help you with the money decisions. So when you meet with me, it's typically going to be through one of my divorce workshops or a referral, and what I do is to help you pull together all of the financial aspects of your household. So a lot of women we've had a tendency to take a backseat to the money stuff when it comes to our household. So this is a time when we really have to pull up our big girl britches and pull together all of the financial information so we understand what it is that we're working to negotiate dividing in the divorce. So that's my first step is to help women understand what all information they need to be pulling together so that we don't leave anything out of the equation no-transcript final, but into the future as well, and my hope is that this is helping women make more informed decisions about how they're negotiating their divorce settlement.
Speaker 3:Absolutely, and that way they're going into whether it's mediation or the negotiations, with their attorney prepared and having the information that they may not have already had otherwise.
Speaker 1:Correct and with you as a mediator, I'm sure you've had people show up to mediate that just didn't even have all the information. And my question is always how are you going to mediate something if you don't have all the information? And my question is always how are you going to mediate something if you don't have all the info?
Speaker 3:Yeah, sometimes there is definitely some homework that has to be done in between those sessions so that they can gather that additional information. And sometimes, you know, I may also recommend that they reach out to a financial professional or maybe they are talking about the house and they need to, you know, reach out to a mortgage broker. So sometimes there is additional information gathering when they're in those mediation sessions. So is there in your experience? Is there a one common mistake that you can point to that you've seen women make during the divorce process that could have otherwise been prevented?
Speaker 1:The number one mistake is not knowing what they have. You know, they've just not been involved in managing the household finances, so they don't know all of the assets, all of the debts or even the marital income. So that's the first one. The second one is going to be fighting to keep the house at all cost, even when they have no idea what the cash flow is required to keep the home. So two, two big ones right there.
Speaker 3:And I would 100% agree with both of those. All right, so let's talk about this phrase that I know that you love and I absolutely agree with Having a man is not a financial plan. What does that mean to you, and why is it such a crucial mindset shift for women who may be going through a divorce or who may be even, you know, be thinking about getting married?
Speaker 1:A man is not a financial plan. It either makes you angry or you go. Hmm, that's kind of true. But when I say that, it's really about women recognizing their own financial power, because, carrie, for generations we've either been taught directly or indirectly that our husband's going to handle the money, all the investments, in the financial decisions. So what happens if the marriage ends or if he's just making poor financial choices? And I've worked with hundreds of women going through divorce, even those that are just newly widowed, and the ones that I find thrive post that life transition, are the ones who have taken ownership of their financial future. So it's not just about surviving through either the widowhood or divorce, but it's about thriving and making informed decisions as we're rebuilding that secure financial future for yourselves.
Speaker 3:I agree with, wholeheartedly with, that. And the other thing that I'm seeing a lot more you know talk about is this rise of the so-called trad wife movement. I don't know if this is something that you have heard about. You know the traditional wife role, where women are in the stay-at-home parent role and really aren't participating in the financial space. Maybe they just simply don't know what's going on or they are not financially contributing to the household, with the expectation that their spouse is going to continue to financially support the household. Do you have any concerns about what happens in those scenarios?
Speaker 1:It's vitally important, when you are not the major breadwinner or you just aren't at the financial table, that you really do understand what all you have. And this is where including a financial advisor is going to be helpful, because we know the types of things you might have. For example, if your husband's working for a large company that likely has a pension, we know to make sure that we ask about that pension. But if you don't know the information, you just don't know what you're negotiating and you're likely to leave things off the table.
Speaker 1:I think one of the most important things as the non-bred winner or the stay-at-home mom you know, the non-working spouse is to really understand what your living expenses are. Most of us you know we just spend money as we need it. You know we get things that we need when we need them. But the reality is is a lot of us you know. If I ask you, tell me about the expenses associated with your house, more than likely you're going to say well, the mortgage is this much.
Speaker 1:We have a homeowners association, but I bet you're not going to remember that you got to pay the pest control guy every quarter, or that literally, my pest control guy just showed up last week and I was like, okay, yeah, I would not have remembered that expense the lawn maintenance, the pool maintenance, all of the things that are associated. So we really have to kind of dig deep and figure out what is it that we're spending money on day to day, including that that we're spending money on day to day, including that that we're spending for the children? Because the reality is is you're going from a household that either has one income or two. Now you're going to two households and you still have the same level of income. So we've got to understand what it's costing you to live, and this is literally what your attorneys and mediators, like Carrie, are going to use to help you determine what type of additional, you know, marital support you might need, or I'm not calling it the right thing alimony, that type of thing.
Speaker 3:Right, that's right, Great, Absolutely. Are there a few first steps that women should take other than gathering the information you know? So maybe they've already started that process. They've gathered the information. They now know what their budget is. You know what those household expenses are. They now know what the assets are Outside of those couple of things. Are there any other first steps that women should take when they are going through the divorce process, if they have not been the ones in charge of money?
Speaker 1:I believe one of the first things is to ask your attorney to put in an order to maintain the status quo, especially if you don't have access to the assets, bank accounts and what have you.
Speaker 1:We want to make sure that your significant other doesn't just start spending money liquidating accounts, moving assets.
Speaker 1:So having that standing order, you know, to keep the status quo while you're going through the divorce process, I think is a really important you know step. Know that you can't do that until one of you is actually filed for divorce though. So if you aren't there yet, the key is to make sure that you're protecting your credit, that you have an individual account that you only have access to and that that is funded. Now remember, if you take money from a bank account that's currently jointly owned, that's still a marital asset, but you might elect to just take out a little bit of the money that's in the savings account and earmark it into a new account that only you have access to, just for safekeeping. Again, you're not taking the money away from the household, you're just dividing it out so that only you have access to it, and that's a common protection mechanism, just because we don't know when somebody might decide to go close out an account just because we don't know when somebody might decide to go close out an account.
Speaker 3:Yeah, that's always a tricky one for me as an attorney as far as advising a client on, because I 100% agree that there's the protection mechanism. What I sometimes fear and you may have seen it on the mediation side fear, and you may have seen it on the mediation side is that it can potentially raise the conflict between the parties and then escalate the tension, and so it's a fine line that I think women have to or really anyone in that scenario have to walk to make sure that they are protecting themselves but also that they're not inadvertently making the overall case and negotiations more complicated.
Speaker 1:Right, and that's the whole thing. We can't upset the apple cart. It's already upset enough. So, and that's why I always advocate for full disclosure hey, this is what I'm doing. It's not a secret, I'm putting it out there. This is why I'm doing what I'm doing. That just makes it you know above board. Everybody knows what's going on. But, yeah, there's always the risk of raising the red flag.
Speaker 3:Right, and sometimes I also recommend getting a credit card in their own individual name.
Speaker 2:Yes.
Speaker 3:So if expenses come up throughout the process, whether it's professional fees or you know anything else, then they have that kind of to fall back on.
Speaker 1:Absolutely essential. And you know another thing, carrie is, a lot of women don't know that you know, when you're applying for a credit card, you most of us are doing that online. Now the credit card application is going to ask for your income, but it's also going to have a space on that application where you're providing the household income. And the reality is is, if you're filing or applying for that credit card while you're still married, you're actually likely to get more credit available to you because you're including the household income. So to me, that's a step that you need to take. If you don't already have a credit card in your name, that's one of the first things that you want to consider while you still have those marital income assets.
Speaker 3:Absolutely. I know that some women struggle with financial confidence. You know either pre-divorce and sometimes after divorce and they may say you know, I've just never been good with money. I struggle with handling finances. I just this is not something I've ever done. How do you help women shift that mindset?
Speaker 1:Well, this is literally one of my favorite topics, because, women, we're already great with money. We've just been conditioned to doubt ourselves about it. So here's how we turn that around.
Speaker 1:Number one education is power, and I teach women the basics of cash flow, investing, financial planning in a way that makes sense to them. So we're not talking down to anybody there's never a bad or dumb question but we've got to start wherever we are and then know that just a small win is going to help you build confidence. So if you just start by identifying what your expenses are today and being able to say this is what my monthly cash flow looks like, that's a win for you. So take that and pat yourself on the back. Another thing that I recommend is that you really surround yourself with the right people, working with the professionals who respect your goals, and what it is that you're working to achieve is paramount to success, and if you ever are working with somebody and you feel like they're just not listening to you, it's okay to find somebody else, because the thing nothing that we do should be cookie cutter. Everything should be customized to what your needs are.
Speaker 3:Everyone's situation is so different.
Speaker 1:Yes, and everybody, whether you've not ever paid attention to the financial well-being of your family or not, know that you're capable, you're smart and you can absolutely manage and grow your own wealth.
Speaker 3:Right, how do you work with women on financial planning? You know, post transition, whether it's, you know, from a divorce or the death of a spouse versus someone who may have otherwise, you know, really been the one handling the finances from the beginning.
Speaker 1:I think the unique thing here is taking into consideration the person's experience. You know, what exposure have they had to all of the money things you know? And if it's not there, I always start with education. Because if I don't start with education, everybody's going to be so overwhelmed with information it's going to be deer in the headlights. I'm literally afraid to take action. So it all starts with basic education, and at whatever level you're at.
Speaker 1:But once we have a clearer understanding of all of the moving pieces of your financial well-being, then we can start mapping out a plan. And that's where you know. This is where the other side of divorce can be really positive, because now you're totally in charge of what happens with your financial well-being. So we actually talk about what's important to you, about money. A lot of us feel shameful around money, you know, because of how we've been raised. But the reality is it takes money to do just about everything we want to do. So we talk about what's important to you what do you want to be able to do and when do you want to do that? So we're actually talking about your virtues and your priorities and getting those in order first.
Speaker 1:Once we know what's important to you. Now we're going to take a look at what you have in place. That's going to include everything from cash flow analysis to your investment strategy, to your savings strategy strategy to your savings strategy all of the moving pieces. There is what we pull together and we're first going to identify are there any gaps? Is there anything that's missing that we know we need to rectify right away? And how we prioritize those next step action steps is based on your priorities. So that's why having that individual, customized plan is so important. But I think you know, for me, it's always starting with getting the client comfortable with the decisions that they're going to be faced with, so that they can make informed decisions and not being overwhelmed by the process.
Speaker 3:Yeah, yes, and really focusing on each of those steps one by one, so that they are not overwhelmed by the whole thing at one time.
Speaker 1:That's correct, and I have to tell you some people. They just want you to deliver the entire financial plan results to them in one sitting, and I've literally quit doing that because of the paralysis. I would rather map out steps for us to take over the next six months to even 12 months, so that we can tackle them one at a time, because then we're taking baby steps but we're getting things done.
Speaker 3:Right. How does your advice change if you're working with someone who is going through a gray divorce, which we typically are, you know, deeming 50, 55 plus, who are closer to that retirement age?
Speaker 1:Well, the major shift in that conversation is that people are either closer to retiring or they're already retired, and for those who are no longer bringing in any income, the conversation is totally different, because there's no opportunity to continue to grow what you have invested already. So we have to really be cognizant of what exists already and how we're going to be able to stretch whatever those assets are, invest them properly, so we're getting the kind of growth that we need without a lot of risk, so that we can maintain your current lifestyle throughout your life, and life expectancies are expanding and if you're not working and bringing in more money, you know you've got to make that money that you have.
Speaker 3:Work hard for you and last for you, can you talk about the emotional side of money and divorce? Are there things like fear and guilt or shame, as you mentioned before, that show up with your clients who are going through divorce, and how do you work with them to get past those things?
Speaker 1:That is such an awesome question because the thing is, money is emotional and when we're making decisions about money, it makes sense for us to separate out the emotions from the money. We're emotional human beings and everything that we do is based off of emotions. So we really do kind of have to take a step back and say, okay, well, today I've got on my business hat, today I'm looking at this, you know, in a logical way. Yes, I'm still going to feel my emotions and I'm going to deal with my emotions, but we're going to separate that out from the decision making process and I am always an advocate for my clients to have either a life coach, a divorce coach or a counselor, or maybe all three a divorce coach or a counselor or maybe all three.
Speaker 1:But the thing is, is that a financial advisor and an attorney? You know, we're not trained in working with people in their emotions. I understand them, I know them and I experienced them, but I don't have the educational background to help you deal with those emotions as you're going through life. So a counselor, of course, is helping you with you know back stuff, you know what the trauma and stuff that we grew up with, but a coach is going to be working with you in the present and helping you restructure and build for the future. So again it goes back to having that divorce team and, even if it's not divorce, just having that professional team around you that can help you make the best decisions, regardless of what's going on emotionally or whatever.
Speaker 3:I do agree that the team is absolutely critical because we all do play such different roles and have different strengths and education, and one professional is not meant to handle all of those things.
Speaker 1:Correct and you know, and a couple of people, a couple of team members that I'm typically recommending I think you mentioned earlier a mortgage broker, you know is if we're thinking about either keeping the house or buying out our spouse's share, you know we're going to need to refinance the mortgage and see if we even qualify for a mortgage and can we get that extra money so we can buy out our you know, ex's share of the house. We may have to put our house on the market. So, having a real estate agent and there are real estate agents and mortgage brokers who are trained specifically in divorce, so that's another area where we can add to the team to help you make smart decisions.
Speaker 3:Absolutely, and when most professionals can give you referrals, because we typically do have those professionals that we work with regularly and that are prepared for those scenarios.
Speaker 1:Yes.
Speaker 3:All right. What's one message that you would want every woman going through divorce to hear when it comes to her finances?
Speaker 1:to hear when it comes to her finances. Number one a man is not a financial plan. And then number two you are able and capable of managing money on your own, regardless of where you are. We're going to assess where you are and figure out what we need to do to train you and get your confidence built up so that you know that you're going to be making the best informed decisions for yourself and your family as you navigate that transition.
Speaker 3:That's so helpful to really let people know that they are empowered to make those decisions themselves. Yes, donna, thank you so much. Where can our listeners find out more about you and the services that you provide?
Speaker 1:You are welcome to visit my website, which is probably going to be the most helpful, and that's moneymatterswealthcom. I'm also on social media LinkedIn, facebook and Instagram and I do a second Saturday divorce workshop, and we are actually holding that workshop virtually, so the only qualifier for attending that is to be a female, so you can register for that workshop at my website as well.
Speaker 3:Awesome. Thank you so much, donna, for being here today and sharing your wisdom. Remember that divorce can change your relationship status, but it doesn't have to define your financial future. Take what you've learned today and start taking control. And to our listeners if you found this episode helpful, please subscribe, leave us a review and share this episode with anyone who might benefit. Remember, divorce doesn't have to be a disaster. Learning from the lessons of others can help you make smarter decisions and avoid unnecessary drama. Thanks for tuning in to Divorce Diaries Lessons from the Trenches. I'm your host, keri Jacobson host.
Speaker 2:Keri Jacobson. Thanks for joining us today on this episode of Divorce Diaries. Remember, every journey is unique, but you don't have to navigate it alone. Visit JacobsonFamilyLawcom or call 443-726-4912 for support and guidance.