Where did the money go?

Doing divorces has taught me over the years the different ways people manage, or mismanage, their money. Some people live within their means, while others utilize credit. Some people are clear on their finances, while others are not. Those that are not clear on their finances have more of a struggle in divorce because they have to learn the language of managing income against the cost of living and hopefully saving for the future.

There are people though that choose to stay ignorant about their finances. The divorce will one day end, but that individual still has to learn to manage money. I have seen people with multi-million dollar lifestyles have to significantly down grade for the simple fact that they don’t know how to manage their funds nor did they save money when the opportunity to save existed. You would be shocked at the amount of money individuals get accustomed to spending without a flinch.

In less cases, individuals have the ability to spend frivolously because the money is set up to be indefinitely there. But for the remaining vast majority of individuals, what happens if the money ends and there is no back up? The income earner gets sick? Dies? There is no savings? Then what? The pandemic is a reminder that some flourish during this time but there are others that were financially stable but are now struggling, and on top of it, one spouse does not appreciate nor realize the change.

In Silicon Valley we have people that make a lot of money. A lot. Those that are W-2 income earners show significant earnings. To the non-earning spouse, the thought is ‘see, we have a lot of money!’ But, if the reality is that the family spends all their earnings and then some, then there’s nothing to work with as far as feeling secure with finances. The shock of the new life will be real.

Help this situation by spending the time to get educated on what the money is. Sit with a financial planner, friend, or just put the time in yourself to balance the income against the expenses to see what you are working with. It will be uncomfortable and it may not be easy, but the education is worth it.