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Suddenly Single: Where Do You Start?

The global financial meltdown is adding insult to injury for women who find themselves "suddenly single." Declining stock portfolios, widespread lay-offs and an anemic housing market have created the perfect storm for divorcing couples, adding more strain to an already stressful situation.

A former colleague who is going through a sticky divorce recently reached out for some advice. Unfortunately, her situation can't be described as amicable: her soon-to-be ex had already moved on and seemed more interested in pursuing his new lifestyle than securing their children's financial future.

Like many women in an unraveling marriage, she was feeling financially pinched. As a recent Bank of Montreal study pointed out, the expenses incurred by an individual are not half of what a couple spends—they're closer to 75%. There are economies of scale in terms of housing, property taxes, utilities that a couple enjoys…especially when there are two incomes underwriting them.

Kate's* main problem was that she felt completely overwhelmed and didn't even know where to start. Everything seemed to be clamoring for her attention at once: from lining up new childcare arrangements, moving into a smaller condo and looking for full-time employment to arranging for counseling for her children and dealing with a protracted settlement. How could she possibly tackle personal finances on top of it all? Not to mention the fact that her former spouse had usually handled their financial matters…

When we sat down, we focused mainly on basic blocking and tackling. Like any complex problem, it's easier to digest when broken down into bite-sized pieces. So we began by prioritizing Kate's goals into short-term versus longer-term. Did Kate need to think about her children's higher education and rebuilding her retirement nest egg? Absolutely…but wasn't it more important to reduce her high interest credit card debt and pay down her legal expenses first?

After reviewing her cash flow—essentially her monthly household budget—she decided that she wanted to focus on basic protection in the event of an unforeseen health event or her premature death. She also wanted supplemental health and dental coverage for her and the children until she could find full-time employment. Kate was particularly delighted to learn that the health coverage would pay for a portion of the children's therapy—a necessity she was currently funding out-of-pocket. Though her ex-husband had some coverage through his employer, she didn't feel up to the hassle of getting him to contribute.

It's not an easy time for Kate, but she had the courage to deal with her finances and to know when to reach out for help. It may feel easier to kick the can down the road, but at the end of the day she felt reassured knowing that this was one more step towards slowly putting her life back together.

*name changed for privacy

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