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Managing Your Money To Create A New Life After Divorce

Stacey Freeman, After Divorce

With Stacey Freeman, Writer and Blogger for Worthy.com

For Stacey Freeman, Her Divorce Set The Stage For The Creation Of A New Life

Stacey Freeman is a writer and entrepreneur and divorced single mother who created a new career for herself writing about financial and other issues that divorcees often face – as well as opportunities for redefining one’s life.  Her own self-reinvention as a professional writer didn’t happen until after she divorced at age 39 with no work history.  The process of building her confidence as a writer and an audience for her articles took several years before there was any economic payoff .  She started a blog to write about her experiences as a divorced mom living on a fixed budget and the life lessons that followed, as well as to create, showcase and spread her personal “brand” as a freelance writer.  After a few years she enjoyed enough of a national profile to receive a job offer from Worthy.com, who simply wanted her to continue blogging about her experiences and the wisdom she’d gained from them as a divorced single mom struggling to take care of her child, create a new life for herself, and embark on a career.

Overwhelmed By The Emotional Charge Of Money

Backing up a bit, Steve starts the conversation with Stacey by referring to a survey conducted by Worthy.com which asked women about their confidence regarding money issues.  While the majority of those surveyed said they doubted their own competence in this area, the results showed that most women were savvier than they imagined.   Steve says he encounters this same mismatch between people’s perception of their financial literacy and its reality in his CFP practice, and he believes it derives from the emotional impact that accompanies money issues which causes many people to quickly feel overwhelmed.   Stacey offers her early reaction to divorce as an example of this: after many years of managing the family budget down to the dollar in Excel spreadsheets, she couldn’t focus on finances and would sometimes simply pay whichever bill had arrived most recently instead of prioritizing and tracking expenses.  She found herself avoiding financial responsibilities to focus on her divorce and her children.  Steve points out that the incongruity between Stacey’s strong understanding of the family budget and her feelings of being in over her head, mismanaging her money, are a perfect example of emotion undermining knowledge and know how.  She admits that her understanding of household costs later benefitted her greatly when she began preparing the case information statement for her divorce.

Managing Spending After Divorce

Stacey has since written about the need for women, particularly women with kids, to learn to create and stick to a budget after a divorce so that they can live on a new and usually fixed income.  Drawing on her own experiences, she recommends that women map out different spending categories, from clothing and makeup to food, utilities, education and retirement funds and more, then see whether they have enough monthly income to cover these costs.  Recognize that you probably can’t continue with the lifestyle you’ve become accustomed to, and start looking for areas where you can cut back.  Frequent restaurant and cafe spending is an obvious place to pull back, and can add up to impressive savings over the longer run.  Gym memberships can be replaced by a few weights at home and a good pair of running shoes.  Avoiding big box stores is a sure fire way to break the temptations they hold over us.  Stacey even advocates for selling high dollar items like jewelry, particularly wedding or engagement rings that have mostly lost any sentimental value.  After much trial and error, including some mistakes and setbacks, she gradually developed a better understanding of and control over her budget, a process she can use throughout the ups and downs of life.

Controlling Household Budget To Meet Goals

In another blog post Stacey talks about having to decide between between several potential expenses on a limited budget.  Steve describes a hypothetical scenario where you have to choose between yoga classes, credit card payments, and a new dress for your daughter, and asks Stacey how she might handle it.   She argues that it’s so difficult to tell your child that, thanks to your divorce, there’s no money for what she wants that you should simply find a way to get the money, whether that means selling older clothes or accessories or, again, jewelry, or skimping on other expenses until you’ve saved up the money for the dress.  Stacey describes meeting with her financial advisor to figure out what she had and what she still needed, and then to create smaller funds and redistribute money into those in need.  Anyone in this situation will face decisions that are more consequential, longer duration and more expensive, such as a 529 college education account or retirement fund.  One key thing to remember is that you’re looking forward, not to the past, especially when it comes to savings.  There’s a snowball effect to savings and debt – otherwise known as compound interest – and it’s crucial to commit to the former and avoid the latter.

Stacey’s Journey To A Dream Career

For the last part of the interview, the conversation turned to how Stacey overcame one of the biggest obstacles of for middle-aged divorced women with limited work history: creating a new career out of little more than aspirations and resilience.  She says that she’d always wanted to write, and that despite whatever difficulties might be involved – and there were many – she decided to pursue this passion.  Instead of going through typical channels like going back to school or trying to become a freelance writer, she created a blog catering to fellow divorcees and attempted to establish a name for herself and a readership on the basis of nothing more than the value of her writing, eventually building a business plan around her work and the community she’d garnered.   Instead of being intimidated by the fact that was older and less social media savvy than the competition, she decided to draw on the experience, wisdom and skills she gained as a housewife: managing a budget, running events at school, etc.  She figured out ways to utilize these skills in her small business plan, both writing about them and putting them to work in new ways.  Over time she had opportunities to publish her work on much larger sites, which in turn amplified her brand and gave her access to a much bigger audience.  She never monetized the blog with ads, instead opting to stay the course and develop a reputation based on what she brought to the table as a writer.

After a few years, she was asked by Worthy.com, an eCommerce site focused on jewelry, to write for them as their Lifestyle Editor.  Not only was the offer exciting, but she found it very gratifying to know that her work had been connecting with and helping people.  Even better, Worthy.com wanted her to continue telling her story and continue articulating the message she has for her readers.  Because putting in all that sweat equity paid off in such an unexpectedly wonderful way, she advocates that other women drop their fears around trying something similar.  The impression Stacey gives is that the most important thing to her is to convince other divorced women that “ if you set your mind to anything and you’re doing what you love, what your passion is, really the sky is the limit.”

Disclosure: The opinions expressed are those of the interviewee and not necessarily United Capital.  Interviewee is not a representative of United Capital. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions.  Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances.  The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by United Capital.

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Steve Pomeranz: The statistics say that about 50% of married couples end up in divorce.  Well, that surely is old news; we’ve heard that before.  But the experience afterward is something rarely discussed in financial circles, especially with regard to the impact on women.  My next guest discusses it and writes about it all the time in a very intelligent manner.

Stacey Freeman is a writer, blogger, a divorced single mom, entrepreneur, and a person that knows how to ask and answer the right questions.  She’s currently the lifestyle editor for Worthy.com, has been connecting with divorced moms across the country through the Worthy Living blog.  I’d like to welcome her to the show. Hey, Stacey.  Welcome.

Stacey Freeman: Hi, it’s nice to be here.

Steve Pomeranz: Let’s start on a positive note.  Worthyliving.com or worthy.com just had a recent study that showed that women are actually pretty savvy when it comes to money.  Tell us a little bit about that.

Stacey Freeman: Well, at Worthy, we conducted this survey and what we found was women actually answered that they didn’t feel confident about how they handled money. But once the results were analyzed, it turns out women actually do know more than they thought.

Steve Pomeranz: Yeah, I’m a financial planner, and I see that a lot. I think a lot of people come in thinking they don’t really know that much, but maybe the statistics tell a different story. That’s very very interesting.

So they know, in general, based on this, they know a lot, but I think a lot of them find themselves overwhelmed, and there’s an emotional impact to the questions about surrounding money.  Give us some examples of that.

Stacey Freeman: Well, I know from my personal experience during my marriage, I handled our finances pretty much within about six months of getting married. I got married very young.  I was still in school, and my then-husband had gone out to work, and he literally could not get to paying the bills; he wasn’t home.  So, I took on that job in our household and began managing our personal finances.  I analyzed them to the umpteenth degree, all throughout our marriage; I had spreadsheets, really analyzed our budget; and then I was suddenly divorced, suddenly separated when I turned 39.

And I didn’t, I couldn’t focus on it.  I was focusing on everything else besides that—the divorce process, my children—and I let things kind of fall by the wayside.  I wasn’t opening the mail.  I like to say the squeaky wheel was getting the grease so whoever was asking me for money was the one who got paid, and that’s really not the way to handle your finances.

Steve Pomeranz: Yeah, so you’re overwhelmed during that period.  There’s a lot going on, especially emotionally.  But you did have a little bit of a head start, in the fact that you were actually crunching the numbers while you were married, so you had a pretty good idea of what you guys were spending. So when you came to the divorce proceedings, that was pretty easy for you, right?

Stacey Freeman: Yeah, I actually had it all set up because I had analyzed our household budget using an Excel spreadsheet and knew pretty much where every dollar was going.  So I did have a head start preparing that case information statement for my divorce.

Steve Pomeranz: One of the blogs that you wrote was about the budget challenges that divorced women now face themselves, especially if there are children involved.  What are some tips that you wrote about that you can offer or solutions that you discovered in order to get your budget in order?

Stacey Freeman: Well, once I got separated, I had to start living on, I hate to say, a fixed income but had a set amount of money each month and it had to be distributed—clothing to household expenses—and I really had to make sure that there was enough money to pay for each of these areas of my life. I had to look and see where I needed to cut back, and I couldn’t live the same lifestyle that I had been living.  So, some of the things that I looked at which I figured I can live without was going out to eat as many times during the week as we had when I was married.

I started making my coffee at home, saving myself over $1,600 a year.  One of the first things I did was cancel my gym membership because all I felt I needed was a few weights, a pair of sneakers, and I was good to go.  I started buying cheaper makeup, just because I had gotten tips from people through the years.

I didn’t need to spend $30 on a mascara, it wasn’t necessary, and who would know what I was wearing anyway?  I stopped going to big box stores.  I just started watching sales at the supermarket and stocking up when things were on sale.  And then, of course, I started looking around my house for things that I didn’t need anymore or didn’t want anymore like clothing, shoes. People have sold diamond jewelry.  That’s one of the things that, you’re not wearing your engagement ring anymore, it’s sitting in a drawer.  And, yes, there may be some sentimental attachment to it, but as time passes, you might want to repurpose it and use that money for something that will further your future.

Steve Pomeranz: Yeah, we all, if you think about it, we all live on a fixed income—unless somehow we’re just infinitely wealthy—but every single one of us lives on a fixed income.  So these ideas really do relate.  We can all relate to them across all of our lifestyles. I think the key here though is that you had a lifestyle with maybe two incomes.  Now, you’re a lifestyle with one income, and I’d like to hear your thoughts about how you manage this idea that you’re setting priorities for your daily living, taking care of your children.  And yet, in the meantime, you have to think about, “well, how is college going to get paid? How am I going to set aside a retirement income?”  What thought processes did you go through for that?

Stacey Freeman: Well, to just correct you on one point, I did not work outside the home during my marriage.  So, that was one of the challenges that I faced after becoming separated. I really had to focus on A, how to manage my money that I had coming in from spousal support and then I had to supplement it.  So [CROSSTALK]

Steve Pomeranz: You had to go out and find something…

Stacey Freeman: I did.

Steve Pomeranz: …to earn a living. I want to talk about that in a minute.
There was one thing which you wrote in one of your blogs that caught my attention.  It says you have to decide, you’re sitting there, you have a limited budget.  Decide between yoga lessons, credit card payments, and a dress wanted by your daughter.  How do you handle that kind of situation?

Stacey Freeman: Okay, so this is real life. So, that bill is sitting in front of you, but then so is your child.  And it’s very difficult to tell a kid, “hey, you can’t have this because we don’t have the money because we’re now divorced.  Your parents aren’t married, and there’s limited amounts of money.”

It’s very difficult in real life to turn to your child and say you can’t have this. You have to look at the big picture.  Where can I get this money from with what I have?  So, a great way is to sell things around your house.  I don’t need this anymore; I don’t need my engagement ring; I’m not wearing it. I don’t need that expensive pair of shoes, that bag is out of style.  So, get rid of that, cut from certain areas.  And then, lo and behold, the money appears, and then you can use it for something that’s more pressing or something that you want and will enjoy.

Steve Pomeranz: Great, that’s an interesting answer.  So, getting back to this idea that you’re now handling the present, and it’s not easy from what you’re describing to make these changes.  Some of them must be pretty gut-wrenching, but you’re also thinking about college in the future and your own retirement, how did you handle that?

Stacey Freeman: So, I analyzed with my financial advisor what I had and what I still needed. I have set up smaller funds and targeted those areas that I need to supplement.  And just as I cut from certain areas, I now have redistributed into the areas that are still lacking.

Steve Pomeranz: So college fund, you set up a 529 or something?

Stacey Freeman: Well, we had set up 529s when each child was born and had put in a little bit here and there as well as saving regularly.  So even if your child is 15 you think, “my God, I’m only three years away. What can I do now?”  The money adds up quickly.  So even if you’re putting in that birthday present from the grandparents or money that they got for a religious event or whatever, it adds up quickly, so you can’t look at it like I didn’t do this in the past. You have to look forward.

Steve Pomeranz: Yeah, there is a snowball effect, I tell people who haven’t saved. And then they start saving, and a thousand becomes five before you know it, becomes ten.  I mean you just keep doing it.  You keep at it.  It’s amazing how fast this can accumulate, just like debt on the bad side of things.

Debt can accumulate really fast too, but so can savings. So don’t ever forget that, I think that’s a very good lesson.  My guest is Stacey Freeman, writer, blogger, divorced single mom, entrepreneur, and the lifestyle editor for worthy.com, and she has her Worthy Living blog.  You did something that I thought was pretty unusual, Stacey, when you decided to go back to work, you just didn’t look for any job.  You decided to pursue a life’s passion, which I thought was pretty risky and pretty brave.  Tell us about that.

Stacey Freeman: Yeah, I had to figure out what I was going to do with my life. And, obviously, divorce is a big life change.  And my overarching goal was to be happy, and I loved writing, always even as a young child, and that is what I wanted to do, and I had to figure out how to monetize it.  So, I had sat down and started a blog, got my name out there and developed a business plan.

And within a few years, I now have a growing business, and once my children are out of the house, something I can continue to grow as the years go by.  I have something to look forward to; I have something for now and for my future.

Steve Pomeranz: You must have run into some obstacles, the social media world is populated by a lot of younger people. So, I’m thinking you probably went in thinking, “well, am I going to be able to compete against those who were brought up with this social media and blogging and the like?  So, when you, I think you said to yourself, you’re not getting any younger.  What did you do about that?

Stacey Freeman: I kind of looked at what I had done in the past, and I think that many stay-at-home moms don’t really know how much they have done.  And if you just take a step back and look, you’ve been managing your household budget, you’ve been running events at your children’s school. You’ve been doing a lot and those skills can be transitioned into your work life.  So, I think it’s just, first you have to look back and say, “okay, what have I done?  What am I good at?  And how am I going to now utilize this in my new life?”

Steve Pomeranz: Not all work experience happens in an office.

Stacey Freeman: Not at all.

Steve Pomeranz: Right, right.  So, you talked about monetizing this blog.  There’s a lot of people with blogs who wonder how to monetize it.  How do you get money for something like this? What were some of the first steps you took to start getting some income from your blog?

Stacey Freeman: I never really monetized the actual blog.  I used it to promote my own brand.  So, I used it as a way to showcase my skills, and then I went from there. But I never, actually, there are people who do make money from their blog itself, through advertising and other means,  but that was not my plan.

Steve Pomeranz: So you hooked up with an established site—and as I introduced earlier—Worthy.com.  Is that what you’re talking about?

Stacey Freeman: A few years ago, I did start my own blog. This is actually a by-product of the work that I have done over the past few years, so once I was able to write and get myself published on larger platforms, not just my blog, but on more national platforms, my name got out there.

Steve Pomeranz: Awesome.

Stacey Freeman: And Worthy came to me and said, “hey, we’ve been reading some of your things, some of your articles, and will you come and write for us and continue the message that you’ve been putting out there for divorced women and telling your story.”

Steve Pomeranz: That must have been pretty exciting.

Stacey Freeman: It was so exciting.  And it’s very gratifying to know that the work I have done, first of all, is helping other people and that I’m being recognized for it.

So, if you set your mind to anything, and you’re doing what you love, what your passion is, really the sky is the limit.

Steve Pomeranz: You know we’re getting back to this idea about women entering the workforce later.  I mean you’re wiser because you have all these years of experience behind you. You’re bolder because you’ve failed and succeeded so many times before.  You knew what some of the risks are.  Being young has certain advantages because when you’re young you don’t know that you can’t do things.  [LAUGH] And a lot of those things turn out to be successful because everybody thought, you can’t do that, but you’re young, you didn’t know any better. But being older and having more experience helps you to also focus your time, not make so many mistakes.  And did you have to-

Stacey Freeman: I’ve made plenty of mistakes.  I’ve made plenty of mistakes, I think the key is to look at the mistake, realize what can I learn from it, and just not let it get you down. I mean I’ve made plenty of mistakes.  That’s how you learn.  That’s how you figure out what you’re good at and what you’re not.

Steve Pomeranz: Absolutely.  A personal look at the life of Stacey Freeman and how she basically came out of divorce and established a new life for herself, got her budget under control, and then writes about it quite frequently at worthy.com and her Worthy Living blog. Stacey Freeman, thank you so much for joining us today.

Stacey Freeman: Thank you, so nice to be here.