Archive for Divorce Planning

Home ownership and (not so) routine maintenance

English: Standard Hammer

I’m a born condo dweller so I don’t know why I still have this darn house. Okay, it was because I didn’t follow my own advice and kept the house in the divorce. (See this post for why you shouldn’t.) It wasn’t a terrible decision financially—the divorce valuation was at the height of the bust, so the value has allegedly gone up quite a bit, it has a great home office, and my dog thinks the yard is her kingdom. But the reason I should be living in a condo is because I hate maintenance.

If you’ve slugged it out for a while in a divorce, or been on the rocks for a few years before (my hand is up!), you can bet there’s a ton of deferred maintenance. But even if you’re as on top of maintenance as my mom used to be, you can count on being frenemies with some contractors every year your address is a single family dwelling. It’s very important to recognize the ongoing nature of repairs, and budget for them (especially when you’re thinking through a divorce or retirement).

A decent rule of thumb is to budget 1% of the home’s value for regular, ongoing repairs and maintenance. I suppose this might have been accurate if the ex had been dependable and completed the myriad of projects he either started or ignored. But the first few years after my own divorce I had a ton of clean-it-up projects to fix—including the raining in my office which he had been “getting to” for 7 years.

The 1% is a good place to start, but take a closer look at your home for better estimation. Consider these points:

  1. What’s the house made of? If you have wood siding or a lot of trim, you need a paint job probably every 5-7 years.  Get an estimate and divide by 5. If it’s stucco, not so much maintenance but in my first hand experience you occasionally have a piece crack and fall off. Even if you have brick, you’re not home free—tuck-pointing and trim painting will need to be done if you’re not going to develop “unexpected” leaks.
  2. What’s the yard look like? Personally, I’m continually at war with the weeds. In 20 years, I haven’t won, but they really gained ground during two consecutive summers when I first broke my foot and then had to get my dad’s (neglected) home ready for market–I barely touched the yard. My DIY tendencies are rampant when it comes to the yard and I’ve wasted a ton on harebrained ideas—a push mower, lots of plants that I forget to water, and plants sold to me as shade tolerant that succumbed nearly instantly. Nevertheless, if you have a yard you have to budget for plants and trees: replacement plants for the ones that inevitably croak, and tree maintenance. Trees are huge (ugh, pun)—trimming at least every other year, various schemes to abate or prevent pests, and crashes. In 5 years I’ve had to remove 3 trees–$890, $1,600, $2,500. Breathtakingly expensive and often an emergency. If you have teenage kids or are paying for a health club, in my view you don’t need a lawn service. Your mileage may vary. Lawn services, if regular, are not really part of this 1% rule.
  3. How old is your heating plant, water heater, and roof? Make a good guess and put them on the maintenance calendar.
  4. Painting, floor refinishing, and new carpeting are a few things home and condo owners will both need to replace, but for most other issues, the condo assessment fee (if well thought out by the association) should pay for most structural, exterior, or common elements.

As an aside, if you are a condo dweller and want to analyze your assessment, add up the cost of any utilities and insurance it covers, a decent allowance for “saving” for future repairs, and that 1% of value and you have a rough gauge of whether your assessment is reasonable. I’m not quite sure how to measure the aggravation level of finding contractors who actually show up and finish the project.

Every once in a blue moon, I don’t actually spend that 1%. Okay, I do (and more) but I dream about the time when I might get a break. You might not spend that every year, but suddenly get hit with the need to replace the furnace. Start that repair fund now and you’ll keep your plastic in your pocket and your heart in your chest.

So long carpenter. I have to go call the painter.

Hitting the re-start button

 

 

beach in Key West

Certain places are the end of the world. San Francisco was like that when I lived out there, and Key West (from which I just returned) appears to be another. These are places that have more than their share of burned-out cases, but also a high number of people that decided to chuck it all and start their life again.

Key West is delightful in its acceptance of eccentricity, but also in the variety of ages of those who have decided to re-start their lives in some radically new way. The first morning our waitress was in her 70s, with a sequined beret, fingerless gloves, and a few other items of clothing people 20 years younger might hesitate to wear. On the way down, the plane seat right in front of us was occupied by another femme d’un certain âge who was head to toe in red velvet, and who I later saw in the airport kissing the much younger husband she had mentioned. Gives one hope, non?

But the point of this tale is to address all the guilt and regrets I hear this time of year, along with the resolutions to do better. Sure, I’ve got a few regrets myself. Okay, maybe a hundred. What I saw while in Key West was what I think most of us who are baby boomers (or younger) have experienced—you may have to restart your life several times. There are a few people among my clients and acquaintances that knew they wanted to be lawyers at 20 and will retire from that same profession at 66. But far more common is the person who started out as an attorney and is now a shaman, the investment banker who re-trained in Chinese medicine, the corporate executive who retired early to paint, and the divorcée who started an entrepreneurial venture. Technology and the demand for skills has moved so swiftly in the past 30 years that few of us could have known what training we needed “back then”. Few of us planned to get a divorce when we said, “I do”, and all of us believed when pregnant that our children would sail brilliantly from pre-school through the Ivy League to a high paying job, a devoted partner, and a long and healthy life. If only.

Then there are the regrets about not having saved enough, made poor investment choices, and bankrolled a relative or child that turned out to be a black hole. Our brilliant children sprout terrible problems, our competent and ambitious spouse develops a chronic illness, our boss is unreasonable, our co-workers insane, our company gives us the shaft.

What can you do about that history? Truly, nothing. None of us can re-write the past, control another’s behavior, or singlehandedly manage our employer or our clients. Didn’t lose the weight you planned, didn’t meet your savings goal? Um, me too.

On several mornings in Key West, I found myself waking up depressed. I, too, wanted to chuck it all and re-start in some tropical paradise where stress was low, seafood was plentiful, and I didn’t need a winter coat ever again. Or move to Paris. Or sell the house and keep only what fit in a back pack. Or…or…

Once I had my coffee and was able to shake off the effects of the previous night’s tropical drinks, I was able to think this through.

Just about every decision we make seems right at the time. Most of us try to make good decisions based on what we know at that point, or make bad decisions because we’re just too stressed out over something else to focus down. And, every time you make a decision, you close down other possibilities. This is why so many people have great ideas for a novel, but so few of us actually write one. Artistic types in particular may get stuck on the dime because even finished works are never as good as they were in the imagination.

A trip to Key West gave me plenty of examples of the possibilities of alternatives and creating a life different from the past, and people who courageously face what it takes to make that change. We can’t change the past, but we can re-boot and aim toward a different future. As long as you’re alive, it’s possible.

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Getting divorced? Everything you’re worrying about is wrong.

Especially if you’re a woman, I can almost guarantee that you’re worrying about child support and whether you can keep the house. But in the scheme of things, child support is relatively temporary and you should do some heavy number crunching before you keep the house. (See my blog post here on that topic). So what will really have an impact on your future?

  •          Select a lawyer who knows how to negotiate. A lot of people want a bare fanged tiger who will annihilate the other side. If only. What an angry and overly aggressive attorney usually achieves is big legal bills, which doesn’t exactly result in direct benefit to you. While you certainly want someone who will work for your interests, I’d suggest a cool head in an inevitably hot situation is more productive of actually getting a fair divorce in a reasonable time. And my personal observation is that judges hate someone who loses their temper and prolongs the case.
  •          A lot of women (and some men) throw up their hands when asked to provide data for the financial affidavit. They’ve never kept precise track of expenses, they don’t know how to use a program like Quicken or Mint, and therefore they have no real idea of what it will actually cost them to live post-divorce. You don’t want to settle, THEN find out that your real, justifiable expenses are far, far higher than what you represented to the court. You can’t just make this up or guesstimate. So dig out credit card statements, bank statements (including how many ATM visits you make), receipts emailed to you by Amazon, Land’s End, Net-a-Porter or wherever else you shop, and try to reconstruct what you really and truly spend. Get help (from a financial planner like me) if it’s all too overwhelming or you’ve never done it before or the best you can do is fill up a shopping bag with receipts. Don’t be modest and don’t be ashamed about this—it can be hard to face but it’s a critically important step for your current divorce case and your future. If you want to worry, here’s the place to put your energies. This gives most people a great big headache. The rest become financial planners or CPAs.
  •          Plan what you’re going to do post-divorce. Given the times we live in, if you have any kind of education, you’re probably going to be expected to go back to work at some point if you’ve been a stay-at-home-parent. Divorce cases can drag on for years—time enough to get further professional education, join networking groups and associations, and update your skills. If your wardrobe consists of denim jumpers and clothes from Goodwill, you’ll need to upgrade your personal appearance. When was the last time you were at a dentist?
  •          If your share of assets might be large enough that you don’t have to go back to work, you still have a job—managing those assets. Sure, financial advisors (like me) can offer you valuable assistance and manage it for you, but you’ll feel a lot more secure and be less likely to be fleeced by some sharpie if you have some understanding of what’s going on, and why the advisor is recommending the specific actions and investments. Boring? Confusing? Really, just read 15 minutes a day—financial magazines (Kiplingers), websites (Vanguard has great free education materials, also NAPFA.org), gosh, even Susie Orman if you must (post on her here). Don’t believe everything, and don’t believe people who scream at you (Jim Cramer, ugh). You’ll be proud of yourself, honest.
  •          Don’t spend the next 10 years arguing about the kids. Unless your spouse has horns and a forked tail and shows up that way in court, visitation is going to happen. The less conflict your kids have to listen to, the better they’re likely to come out of this. Put a lid on it and get on with it. By the time they get to college, they’ll have plenty of notes to compare with all the other kids who have a)divorced parents (50% of us) and b)insane parents (all the rest according to the kids). Nobody looks at their kids and says, I hope to make your life as miserable as possible. Not even your soon-to-be-ex-spouse. So don’t.
  •          Divorce isn’t really about evening things up, punishing anyone, or even really about what’s right. It’s about money. See a psychologist, see a financial planner, find friends who will listen. They’re all cheaper per hour than your attorney. Let your attorney do what he or she does best—work the law and negotiate for your best achievable deal. Nobody comes out of a divorce whole. You want to come out of a divorce with the ability to restart your life.