Money will become a new reality for you, and your new reality affords you a chance to reassess your relationship with money.  We both took a hard look at our spending habits and made changes upon getting a divorce. Take it or leave it, we’re going to share our perspectives on making and saving sad and mad Benjamins.

SAD ABOUT IT:

A man in crisis doesn’t do moderation well, and so he faces a stark fiscal choice: he can spend a lot of money or he can spend very little money.  Both responses are totally understandable, but I urge you to aim for the latter option. Retail therapy is bullsh*t consumerist nonsense. Credit cards are bad news.  You can live close to the bone to get back to where you want to be. Along the way, buy stuff that matters to you, sure, but consider saving your money. How? Why? Let me tell you a little story.  Like I’ve shared before, I traveled internationally after signing my separation agreement. I didn’t do this because I live a life of luxurious indulgence. I did this because I was homeless and messed up in the head.  That European voyage was weird but good to do, and an old friend flew over to visit with me for a week. We went on long walks, drank wine, and talked about life’s disappointments. I was a mess, and–at some point–I went on and on about the money I had lost due to my separation and the imminent divorce.  She said, “Do you read Mr. Money Mustache?” I said, “What?” And at that moment my life changed; read Mr. Money Mustache to understand why. He will tell you lots of things, but he will make it clear that thrift is your friend. He advocates for early retirement through what he terms financial badassity. (He retired from a humdrum work-a-day life at age 30.)   His concept of financial badassity fits well with a divorcing man’s lifestyle. I know that MMM, as I call him when talking with friends, helped me reframe my two years of divorce recovery as a liberating experience, an opportunity to embrace a better and thriftier lifestyle. That was an amazing decision, a way to find empowerment when my sense of agency felt compromised otherwise.  So join the cult and become a Mustachian. This is about survival and, eventually, thriving in your new life. Here is the place to start your education.

MAD ABOUT IT:

So, the split of your sacred union has led to the split of your sacred stuff. Namely, your assets and your debts. In most cases, it’s all getting cut in half. No matter how you slice it, you have less to work with initially, unless all you had to split was debt, in which case, this is a great opportunity to make some changes and work towards more sound financial decisions. But, if you are splitting up accounts, cars, property, 401k’s, etc. you will have less stuff apart then you would have together. What to do about this? Of course you want to take a full inventory, assess your borrowing power, prioritize your savings, and create a budget. But the ONE thing that will help improve your situation and distract you from the awkward misery of divorce, is HUSTLE. Hustle to earn more, save more, and pay for more. You may have alimony or child support. Paying those things sucks, no matter how altruistic you may be. But you and you alone are now calling your own financial shots. Take a deep and free breath, weigh your dollar decisions, and don’t throw sticks in your own path. Or you’ll end up paying for it. 

SAD ABOUT IT:

Mr. Money Mustache has a lot of financial advice very well laid out on his sprawling website, but maybe–like me–you don’t like reading screens.  (Irony alert, I know.) When I was looking for a way to learn about money during the early days of my divorced life, I went searching for a physical book by MMM.  No dice. What I found, though, was that he had written the introduction for JL Collins’s The Simple Road to Wealth.  I read most of Collins’s book (based on a blog, by the way) in one sitting.  Using MMM as my guide, I bought the book as a gift but read it before giving it away.  (Thrifty!) Libraries are a good way to go, too. Anyway, the point is the book laid out a clear and strong argument for financial independence through basic, simplistic investment strategies.  I boiled it down to five action steps (that can apply to your situation if you have a bit of liquidity and a retirement account, but–to be clear–you would want to make sure what to do for yourself; this is just what I did, and I was happy with the results): 

1. First, I fired my stockbroker, and liquidated everything I had put into stocks previously.  
2. Second, I put that money into VTSAX–Vanguard Total Stock Market Exchange (Admiral Shares). This investment, as Collins puts it, allowed me to think of everyone who works for a publicly traded company as one of my employees.  All that productivity benefits me because the VTSAX is exactly what it sounds like. It is a multi-trillion dollar index fund (a special kind of mutual fund that Collins and MMM explain) that includes bits from the whole damn stock market.  Better yet, Vanguard is operated on the philosophy that the only way to make more money for clients is to have fewer fees for clients. Vanguard is known in financial circles for being thrifty and for creating great returns through index funds.  Hell, the founder of Vanguard was the man who invented the index fund as a concept. (If you read my MMM link above then you saw that he, too, recommends Vanguard.) Most investors don’t know this stuff, so they go with stockbrokers who take big fees and percentages out of the earnings.  (That sucks!) For a step toward independence: take control of your money by setting up an account with Vanguard, and then buy everything all at once through VTSAX. Done. (RIP, Mr. Bogle!)
3. Third, I considered my goals in the context of “F*ck You Money.”  This is what Collins calls money that keeps you from ever having to say yes to something you think is wrong, unethical, bad, boring, or soul sucking.  This is true independence in the form of financial freedom from your boss. (Here is a great clip of Collins explaining the concept by riffing off of a scene from The Gambler; if you haven’t seen The Gambler then watch the original clip here.)  Once you realize the power of F*ck You Money then you’ll get your sh*t together.
4. Fourth, I got involved with my retirement account.  My retirement account was with a pretty good outfit (chosen through my workplace), but it didn’t work with Vanguard funds; in this case, I took Collins’s recommendation to aggressively go after returns in a pretty safe way.  This took the form of putting my retirement funds into an all-stock mutual fund that mirrored the S&P 500. So if you’re keeping track, I had all of my investment money put into two mutual funds located in two accounts. That’s it.  I installed an easy “ticker” on my phone and computer, and it updates at the end of the day only because mutual funds don’t move constantly (like individual stocks). They open in the morning and then they close in the afternoon, so this keeps me from being obsessed with my investments.  They just grow most of the time. And I can easily follow the progress without any hassle. The 21st century has some perks.
5. Fifth, I established an annual tradition of buying myself a ROTH-IRA through Vanguard.

Maybe that all seems impossible to you right now, but I urge you to think on it ASAP.  If you have a decent job then those five steps are applicable, and they might take you to a place where you find stability and freedom.  Time’s a-wasting. At least buy Collins’s book.  You need to consider a way to fix your life in the long term, and–with that in mind–now is a perfect time for you to begin working toward financial independence.  I turned my sadness into a motivation, and this gave me something to feel a bit less sad about.

MAD ABOUT IT:

Well said. I turned my madness into motivation. I was determined not to miss one payment or provide any leverage that my Ex could use against me during this tenuous time. While we have a decent relationship now, I did not know how far she would push a consequence for missing a payment. I preferred to never find out and I used that to fuel my fire. The sooner you can get some cash stacked back, the better you will feel. And remember the only way to reach that oasis called “f*ck you money” is to not throw sticks in your own path with “f*ck yourself money.” And by that, I bet you know what I mean; those spending decisions that will only work against financial independence. Do you NEED that $5 beer, or that subscription, or that other thing that will lose its luster and leave you a little lighter in the wallet? I want everyone that reads this to get their head above water as quickly as possible so we can all fly high, dropping dollars like proud, free, man-eagles. Get yours!

SAD ABOUT IT:

I often talk about my financial trinity when I try to stage a fiscal intervention with one of my friends.  Mr. Money Mustache is my go-to guy for thinking about thrift. JL Collins conveys the importance of financial independence.  But it is YNAB (You Need A Budget) that offers a gateway to freedom through budgeting software. A subscription service, YNAB costs $50 a year (get it here), but it just might save your ass.  Mint (another app) is cool for bookkeeping (and it’s free), but it does all the work for you.  As a result, I think Mint isn’t about freedom; it is a starter-level form of a-little-bit-lazy bookkeeping with snazzy graphic design.  YNAB, though, requires you to roll up your sleeves and manage your own money at a granular level, but it does so in a way that is intuitive and clarifying.  (It might be easiest for you to understand the powerful potential of YNAB by checking out their explanatory video. Here you go.)  So whereas MMM and Collins talk about seven year or thirty-five year plans, YNAB pertains to daily, monthly, and annual plans.  YNAB requires some work, and it costs money, but it’s worth it.  Eventually, it can liberate you from any stresses you might have about money, and that will allow you to ease into a divorced lifestyle without worries about money.  In fact, I just gave you advice and resources that might make your single life both lucrative and empowering. Check that out! Things can get better. Turn your tears into gold, boy.

MAD ABOUT IT:

Don’t be afraid of your money. Face it now and get to know where every red cent resides. You are now a pillar, not a column. I remember taking the picture I had of my wife down at the office shortly after I realized it was done-done. That symbolized something for me. While I was still working to support this unit, I was no longer doing it with a partner to build something together, I was now working towards affording a payment. Just like a bill you pay, you should get something out of it. I get a couple of things. Satisfaction in knowing I can make good on my commitment and, and this is definitely my favorite part, I pay to not have to deal with the bullsh*t that drove me crazy in the first place.