Rhoda was in her fifties when she faced divorced again. Aside from the bitter disappointment of a marriage that didn’t last, Rhoda was financially ruined. As someone who’d always been responsible about money and valued her credit rating, it was devastating. Here’s Rhoda.
I was almost one hundred percent ruined by my ex and that has been the hardest for me to face, that and dealing with the after math of all of that.
I was always independent. Even in my previous marriage I was always independent; worked, paid my own way, paid my bills, had a house that was paid for. I really got taken advantage of in a lot of ways. That’s one of the things that totally blindsided me with me trying to trust and make things work. I let someone control way too much and that ended up almost ruining me.
I ended up filing for bankruptcy a year ago. It was horrible to realize that was my only choice. I did not have any other choice but to do that and it was very humbling because of my past history. I had always had perfect credit and taken care of myself so it was very humbling to then face the fact that you have let someone else ruin you so badly that you don’t have any choice but to file for bankruptcy.
That was horrible but also I realized that it was not the end of the world either. There’s a lot of people that have come out on the other side and I always knew I would make it to the other side.
One of things that happened about a year ago was that I went to open a bank account and I went to my parents’ small little bank. I think they did a credit report or something and then came back and told me that they could not open a bank account for me. It was shocking. To have someone tell me that, after all these years living all my life a certain way, it was just very embarrassing.
Then I went down to another very prominent, nice bank and they were, they were very wonderful to deal with and they have not given my any problems at all. I knew initially it would be something I would have to deal with, building my credit back and all that and I am still doing that now a year later cause it stays on your record for I think seven or ten years or something like that.
I don’t sit and think about it all the time. I just know I have to deal with getting my credit rating better and working on improving it in the next few years. And I will. I know I will. So, it’s not something I sit around and mope about. It’s just one of those things that happened, I deal with it and move on.
The Divorce Coach Says
Rhoda and I didn’t get into the nitty, gritty details of what her ex did and they’re not required to appreciate the cautionary tale here. She isn’t the first person I’ve talked to in this situation – Kirstie’s stockbroker husband drained all their resources and left her nothing but debts. The message is that no matter what, you have to stay informed about your finances. It’s a crucial part of accepting responsibility for your life.
Your partner may want to handle the financial transactions and that’s OK but you still need to understand what’s going on and you still need to review statements. Your partner might challenge your interest with, “Don’t you trust me?” That in itself should be a red flag because trust is about transparency, collaboration and open communication. It isn’t about secrets. However, the better answer to the trust question should be, “This isn’t about trust. It’s about being responsible for my life.”
Understanding money may not be as exciting as spending it but if you don’t know how much money you have, how much do you know you can spend? If you’re shying away from understanding your finances, then ask yourself why? Does it go back to a feeling that you’re not good with numbers? Does it speak to a fear of not having enough? Is it because you really do wish someone else would just take care of you?
In addition to confronting your emotions about your money, you need to come up with a practical financial plan and that starts with understanding the difference between good debt and bad debt.
Good debt is the sort of debt that when paid on time, with a low interest rate, can help you build up your credit score. Some student loans, mortgages and even some car loans would be considered good debt. Whatever kind of “good” debt you have, be sure to understand the interest rate and the time it will take to pay it off. Some people make it a goal to live debt free, some people are comfortable carrying some debt. It’s a personal decision.
Bad debt is usually associated with credit cards. These tend to have higher rates of interest and since the interest compounds on balances, it’s easy to dig yourself into a deeper and deeper hole. The interest on credit cards is like putting money into the shredder.
Most financial plans start with recommending that you build up an emergency fund to cover up to three months of household expenses. When it comes to handling debt however, you want to be paying off the credit card debt before you start your emergency fund because your debt is costing you money in interest charges each month.
Quite simply, as Sallie Krawcheck, Co-Founder and CEO of Ellevest says, “If you have credit card debt, pay it off now. Do not pass go. Do not collect $200.”
No matter what state your finances are in, it’s time to take control of your financial future. I encourage you to visit Ellevest to take advantage of their free Investment Plan. What are you waiting for?
I’m excited to be partnering with Ellevest to start conversations about women and money. I may receive compensation if you become an Ellevest client.