Written by Elaine King, CFP

It’s a tough time to be a young adult. Stagnating wages, inflation, and a possible period of stagflation on the horizon mean that the economic outlook isn’t exactly full of sunny skies and rainbows. For a majority of young adults, these tough economic times mean a return to their childhood home. As of 2020, 52% of 18 to 29-year-olds lived with at least one of their parents, exceeding the previous record made during the Great Depression era.  

Some of the main reasons young adult children return to the nest are job loss, financial hardship, and college campus closures due to Covid-19. So, how can you help your child fly free once again and achieve their full independence? It’s not easy, but the good news is that economic downturns don’t last forever. Plus, with hard work and the right guidance, your child will soon be able to turn things around and succeed, even in the face of difficulty.

Here are some suggestions to help your adult child get back on their feet:

Make a Plan

It’s understandable that you want to support your child as much as possible. Yet, part of that support is helping your child face the reality of adult life. Here are some points to consider:

• Set a Date for Moving Out. With this in mind, your child will have a goal of getting a job and/or saving enough money for a deposit for rent or a down payment. This doesn’t have to be set in stone but will serve as a general expectation that can be reevaluated as necessary.
• Think Twice Before Giving Gifts. It’s easy to fall back into old habits from when your child lived with you before. You may even think to give them an allowance, buy them clothes, or pass them a $20 when they head out with friends. Instead, opt for more thoughtful gifts that will help them advance as adults, such as a financial coaching session or financial literacy class. Or, you might offer to match contributions to a savings account up to a certain amount. 
• Encourage Your Child to Build an Emergency Fund. While living at home, your adult child will be able to save some money on rent and groceries. Even if they contribute to the household (which is a great idea!), it will likely be less costly than if they had to pay market rates. Creating an emergency fund can help your child avoid needing to be bailed out again in the future, helping them build essential financial security that will help them weather tough economic times. 
• Help them Make a Budget. If your child hasn’t learned basic budgeting skills, help them create one. From a simple spreadsheet to using an app like Mint can help your child learn to track expenses and income. Ultimately, the goal is to limit spending and make sure that savings are set aside each month. 

Set Expectations

The recession and inflation affect everyone. If your employment or retirement status has been affected by these changes, don’t be afraid to share this information with your adult child. In fact, sharing some basics about your financial situation can be important to ensure that the household continues to function. You might consider explaining some of the changes that you’ll be making before suggesting contributions that your child might make. For example, you might say “I’ll be packing lunches and taking coffee to work rather than buying, perhaps you could help pay for X item in our budget.” The goal isn’t so much to force your child to pay up, but instead for them to make a symbolic contribution that helps build a sense of responsibility.

You may also want to discuss expectations surrounding:

• Chores
• Visitors
• Curfew
• Damage to the house, furniture, or appliances

Getting Back on Their Feet

Many parents also want to help their children get back on their feet with generous gifts or loans. For example, you may want to pay for your child’s college tuition, invest in their new business, or fund the down payment so that they can purchase a home. Rather than make a complete gift, consider offering to contribute to a portion of these needs. Or, for example, offer to pay your child’s college tuition as a loan that can be paid back at a very low-interest rate in twenty years. This way, your child has the opportunity to show responsibility without being on the hook for a higher, more strict bank loan. 

Ultimately, each family is different and you know your child and your relationship with them. Take comfort in the fact that you’re not alone. Many families are navigating this same situation right now! Before you know it, your adult will be living a more independent life. In the meantime, enjoy the closeness you can enjoy while living in the same home again.

If you are a woman and have gone through a divorce, believe me, I know what you’re going through. I’m not divorced myself, but I’m the child of divorced parents, and that experience taught me a lot.  

In fact, I’d venture to say this crucial event in my life motivated me to become a Certified Financial Planner and Certified Divorce Financial Analyst, as well as getting my postgraduate in family therapy.  

There are many reasons you could have gone through a divorce. We are not here to look at the past but to focus on your bright future, in which you’ll conquer your finances. 

Here is what every divorced woman should know about money.

Create a budget

With divorce comes the enormous challenge of reconfiguring your life. Now, what you and your partner used to do together you must do on your own, from big things like contributing financially to the household income to small things, like filling up your car with gas at night. In addition, you’re living in a world where women make, on average, 79 cents to every dollar a man earns for the same work.

After a divorce, women need to be lean and mean, mustering up extra power to make their finances fit their new life. How do you do this, you ask? With a lot of discipline and an intimate relationship with your new spending plan (aka your budget) — this is your new best friend.  

Start by detoxing every expense that does not make you 100% happy and that is not necessary. In addition, link your finances to an app, such as Mint or You Need a Budget, that can keep track of your spending vs. your budget. Keep the difference between your spending and income in a high-yield savings account.

A word of caution: Be careful not to overcompensate with shopping or trying to buy your way into happiness; it is common to spend more or eat more when you’re feeling emotional. Instead, fill your day with financial affirmations, meditation, social impact, and exercise that will clear your mind and lead you to a positive life of prosperity.

Know the value of your time and delegate tasks that aren’t worth it

Every divorced woman should fully understand the value of her time. For example, if you work 60 hours a week in a full-time job with a salary (or you run a business) and you make X amount of dollars, divide the dollars by the hours to calculate what you are making per hour. 

This amount will help you decide if the one-hour phone call to the cable company or the two-hour supermarket shopping trip is aligned with achieving your financial goals — consider delegating or consolidating tasks or ordering online when you can.  

Build an emergency fund and protect yourself

Before, you may have been able to rely on your spouse in the event of a financial emergency. Now, you should have three to six months of fixed expenses saved to weather any storm that may come your way.  

Also, make sure to protect all your assets with insurance — you’ll need to cover your car, house, and health, and you may want to get life insurance (if you don’t already have it) as well as disability insurance in the event of a medical issue that prevents you from working. You cannot afford to lose your hard-earned money, and insurance is a good strategy to lower your out-of-pocket expenses in case of an accident. 

You should update your estate planning documents, too. This includes your health care directive, durable power of attorney, guardianships, and insurance beneficiaries. 

Finally, it’s a good idea to focus on your long-term finances by investing your money so that it grows. After all, women live 10 years longer than men on average, so make sure your money will last by investing. 

Recognized as 2017 People Magazine’s 25 Most Powerful Women, Elaine King is a Family Business Advisor and a Certified Financial Planner professional who is considered an expert in international family financial planning and an ambassador for the CFP Board of Standards.  She is also the founder of the Family and Money Matters Institute, whose mission is to empower the family’s human & financial capital making money a positive force.

After COVID-19, spouses under stress should consider using the Collaborative Process to resolve their marital disputes.

by:  Robert J. Merlin, Esq.

The Law Office of Robert J. Merlin, Esq., rmerlin@merlinlaw.com

The COVID-19 pandemic has forced people to live in close quarters under stressful circumstances. Sometimes, that will lead people to decide to get divorced. If you are thinking about ending your marriage, here are some things you should know.

Getting divorced should be the last resort. The first place to start is to talk with your spouse about what is bothering you about your relationship. That could be a difficult conversation many people are not willing to have, but it is the fastest and least expensive choice. If that does not work, there are therapists who can help you and your spouse to discuss the problems you are having. The investment of that time and money can possibly save your marriage.

If you still want to end your marriage, you should know your choices for handling your divorce. Most people only know about fighting in court, but there are other ways to address the problems in your marriage.

Sometimes, simply entering into a Postnuptial Agreement is enough to calm things down. This type of agreement enables the couple to agree how to handle things if the marriage ends, such as how to divide assets, how much alimony and child support will be paid and how the family members will live together. This choice is not for everyone, but it may be an inexpensive way to resolve your differences with your spouse.

You can negotiate a settlement with your spouse. If you have minor children, you will need to agree how to make decisions about their education, medical care, religious upbringing and extra-curricular activities. You will need to decide how to share time with the children. You can agree to any timesharing system that you and your spouse feel is in your children’s best interest. You will also need to decide how to divide your assets and liabilities and you will need to decide whether one of you will pay alimony to the other. You need to decide how much alimony will be paid and for how long. Once you and your spouse sign a written settlement agreement, one of you must file a petition in court to ask a judge to approve your agreement and to dissolve your marriage.

If you cannot negotiate a settlement with your spouse, you can use a mediator to help you settle everything. A mediator is a neutral person who will help you and your spouse negotiate a settlement. The mediator cannot give you or your spouse any legal advice but can suggest ways to settle your differences. Using a mediator can be relatively inexpensive and can minimize the arguments you have with your spouse, but unless you have an attorney during the mediation, you may not know what the law is and what choices you have to resolve your differences with your spouse.

You can file a divorce action in court with or without an attorney. Once you file in court, children, family, friends, co-workers and competitors can see the details of your divorce. When you file in court, you empower a judge to make decisions for your family. The judge does not necessarily have the education, training or experience to know how to resolve differences in the best interest of your family. A judge must make decisions based upon laws, rules and appellate decisions, so the judge does not have the flexibility to be creative in resolving contested. Typically, litigating in court is the most expensive way to get divorced. Sometimes, the attorneys fight each other, and some attorneys have been known to cause more problems than they resolve. It is difficult to get hearings before a judge, especially now. Some courts in Florida are closed, but you may be able to get hearings that will be handled by phone or Zoom.

Perhaps the best way to resolve differences with your spouse is to use the Collaborative Process. The Collaborative Process is a private way for couples to negotiate everything related to their divorce with the help of a team of experts. Everything done in the Collaborative Process is private, so no outsiders should know what is happening until simple papers are filed in court. Instead of family attorneys fighting each other, Collaborative professionals work together to help the couple determine their future and the future of their children. This makes sense because you and your spouse should be in the best position to determine what is in your family’s best interest, as opposed to a judge making decisions for you.

            The distinguishing characteristics of the Collaborative Process are:

• You have the freedom to create a settlement that meets your family’s needs, rather than a judge dictating that to you.
• There is a constant focus on the best interest of the children. We use a neutral mental health professional as a facilitator or child specialist. The Collaborative Process is the only process where such an expert is part of the team to help your family. The facilitator helps the couple focus on resolving their differences, rather than battling each other.
• Each party has their own attorney, who is specially trained in the Collaborative Process. The attorneys do not work against each other, as in litigation. They work together to help you and your spouse settle everything.
• When appropriate, a neutral financial professional is used. This is important when there are significant assets and income or complicated financial issues. In litigation, each party’s attorney usually retains their own forensic accountant, thereby doubling the cost of a financial professional.
• The Collaborative Process is confidential and privileged, so no one should discuss what happens during the process with anyone else. Information and documents are voluntarily exchanged, and the couple commits to transparency. There is no need to go to court to ask a judge to order someone to produce a document or to provide information.
• The couple and professionals meet together. As a result, the Collaborative Process should take much less time than litigation.
• The Collaborative Process is voluntary, so either party can terminate it at any time, but if they do, the attorneys cannot represent them in contested litigation against each other.  The termination of a Collaborative matter is rare, with approximately 90% of Collaborative matters in Florida resulting in a settlement.
• Few people who have used the Collaborative Process ever return to court after obtaining their final judgment. In litigation, it is very common for one of the parties to return to court, thereby causing more conflict between the couple.
•  

The goal of every couple getting divorced should be to resolve their differences as quickly as possible, always focusing on the family’s particular needs. Florida Statutes Section 61.55 states:

“It is the policy of this state to encourage the peaceful resolution of disputes and the early resolution of pending litigation through a voluntary settlement process. The collaborative law process is a unique nonadversarial process that preserves a working relationship between the parties and reduces the emotional and financial toll of litigation.” (Emphasis added)

Attorneys have an ethical duty to ensure that their client makes an informed decision about their matter. This includes explaining the options for handling their divorce and the advantages and disadvantages of each option. Most family attorneys only talk about litigating and possibly mediation. Very few discuss the Collaborative Process. Before meeting with an attorney, you should ask if they use the Collaborative Process. If the attorney does not use the Collaborative Process, you should consider consulting with an attorney who can provide the Collaborative Process to help you resolve your differences in a peaceful, respectful and private way.

by Rosemarie S. Roth, Esq. and Lana M. Stern, Ph.D. Florida Collaborative Trainers, www.floridacollaborativetrainers.com

Communications are a critical component in the Collaborative Process.  It should be so simple – I say something, you hear it – everything is fine! So what can go wrong? Just about everything!  Communication is so central to everything we do, think and feel that we hardly give it a moment’s pause. It is comprised of many parts – spoken and written language, body language, cognitive distortions (how we interpret what we hear and see) and more.

The Collaborative Process helps educate divorcing spouses on the tone and content of information being shared and how to actively listen and respect another person’s point of view.  Tone and inflection of spoken language are among the key components of verbal communications. Nonverbal messages are transmitted by facial expressions, eye contact and positions, physical touch, dress, posture and even the physical space between people. Written language lacks these nuances and is open to interpretation by the reader.  Our gestures and body language transmit more than what we say or mean. Cognitive distortions describe how we interpret what we see, hear and say since they are automatic and unconscious reflections of our own biases and experiences (people are notdeliberately misinterpreting).  We filter out what we don’t want to hear, see things as “black or white,” jump to conclusions, catastrophize, personalize, blame and label. Mix in cultural diversity, and it becomes immediately obvious just how complicated communications can be. Consistent verbal and non-verbal communications can help a divorcing spouse send the “real” messages that we mean to convey and enhance understanding of one another.

In the Collaborative Process, commands, critical language, moralizing, threats and name calling will immediately shut down a dialogue. In the Collaborative Team meetings, if distortions occur, a reset permits the divorcing spouses to achieve equilibrium to be able to listen to each other. Honest, open communications between the divorcing spouses and the Collaborative Team will enable effective dialogue to reach a meaningful settlement.