Author Topic: Feel like I'm too late to the game. Is there hope for me still?  (Read 6909 times)

FiguringItOut

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Feel like I'm too late to the game. Is there hope for me still?
« on: January 03, 2014, 08:23:56 PM »
Hi.  I am 38, married, with two kids in middle school.  No savings, no college fund, no retirement to speak of, student loans, car loan, and a hefty mortgage.  I also want to get a divorce in a few years (yes, I'm planning it, it's complicated, so please just take my word for it).

I started using YNAB about 5 months ago with great success.  Unfortunately, it has taken me this long to get a good grip on our finances, to catch up on all things that needed fixing (like boiler, car, etc), to start my sinking funds for annual and semiannual expenses, and to finally being able to see the forest for the trees.  It will be few more months before I can get a more definite idea of how much money I can spare monthly to either put away into savings or send to one of our debts.  I also want to start contributing to my 401k plan at work (thank you to those who replied to my earlier post about 401k calculator).

The thing is, I feel like I am too late to the game and I will never accumulate a significant amount of wealth to be comfortable. My salary is fairly low considering my high cost of living area, my husband's salary is about twice what I make.  We need both our incomes to cover the mortgage, all loan payments, regular expenses, etc.  We've cut down a lot lately, but it is as far as I can go, as my husband would not agree to any more cuts in the budget. 

So what do I do now?  Figure out how much I can through at debt and do that?  It will still take about 5 years to pay everything off (except the mortgage).  Or is it better to save money and have cash on had when I do file for divorce?  All of our interest rates are pretty low (from 1.9% to 5%).

Any contribution I would make to my 401k would decrease the amount I can save or pay on the debt. It's a catch 22.

I feel lost and scared and I don't know what to do first that would give me the best chance to survive later.  The reason I'm waiting few years is because I have a potential to significantly increase my income in this time by obtaining certain job certifications and gaining more experience.  Until that happens, I have absolutely no resources to increase my income.

Any advice would be appreciated at this point.

Thank you








Khan

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Re: Feel like I'm too late to the game. Is there hope for me still?
« Reply #1 on: January 03, 2014, 08:43:37 PM »
You're behind only when you look at other people, just as you're behind doing lines of coke when compared to Paris Hilton. It's not an important measure of things.

Think positively, and like this: Many 65 year olds are wholly dependant on social security, have no idea about finances and get suckered into reverse mortgages and get rich quick schemes, and will have a miserable financial end of life.

You're way, WAY ahead of them, and the rest of our consumerist society. Maybe retiring by 40 isn't in the cards for you(I'm 26 and make a decent salary, but I'm not counting it in my cards), but retiring before 65 probably still is, and at the very least if you were living on a paycheck to paycheck high stress life, you can change that up going forward.. There's no time to learn about it then the present. Going forward, you're less susceptible to bad credit offers, and other bad financial advice, amongst other benefits

I would say that I question the idea of divorcing in a few years, I'm not asking for any personal details(in fact, I don't want to know at all), but I'd think that separation and not blindsiding your husband is in order(if you are that is, again, I'm not interested in the actual details).

MKinVA

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Re: Feel like I'm too late to the game. Is there hope for me still?
« Reply #2 on: January 03, 2014, 08:45:31 PM »
First, see a lawyer and found out what your situation is. If you divorced, what debts would be yours, his. What assets would be yours, his. Are you entitled to part of his retirement funds. Is he entitled to part of your retirement funds? Pay the debts that would be yours alone. If he can get part of your retirement, why put money in a retirement account. If you divorce now, would he have to pay spousal support? Child support? Support while you are in school or retraining? Don't plan for a divorce without legal advice. You could end up putting all your effort toward bills that don't belong to you.

FiguringItOut

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Re: Feel like I'm too late to the game. Is there hope for me still?
« Reply #3 on: January 03, 2014, 08:49:28 PM »
Thank you Khanjar for the reply.  Just a quick note: I am not blindsiding my husband.  We are doing in house separation now for 6 months and I've told him that the only reason I haven't filed for divorce yet is because we can't afford it.  He chooses not to hear me say that.  That is his problem at this point.  All I can do is prepare myself as best I can.

I still need to figure out what is best: pay down debt or save cash.  This is my biggest decision right now.

FiguringItOut

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Re: Feel like I'm too late to the game. Is there hope for me still?
« Reply #4 on: January 03, 2014, 08:51:38 PM »
That is true MKinVA.  I will try to get a consult with divorce attorney in the Spring.  No way for me to it before. I suppose the best I can do till then is save as much cash as I can. 

TacosForever

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Re: Feel like I'm too late to the game. Is there hope for me still?
« Reply #5 on: January 03, 2014, 08:58:46 PM »
It goes against the advice that many (most?) would give to someone who has debt, but if you are truly planning to be divorced in a few years, you need to be saving money for yourself and your kids, in an account that is in your name only and under your sole control. While you won't/shouldn't hide those assets during a divorce, the point is you need to have money that your husband can't unexpectedly cut off your access to. I escaped an abusive marriage several years ago (not saying that is your situation), and the only thing that kept me safe and on my feet was the money I'd saved for myself.

You also need to consult with an attorney sooner rather than later to work out a plan. You will have to collect an inventory of all of yours and your husband's assets and debts. This will take time. You also need a credit card in your name only, if you don't have one already. Don't go out of your way to pay debts or fund retirement plans right now - any progress you make could be undone in a divorce settlement. Get advice ASAP from a good attorney, and focus on accumulating liquid assets in your name only (hopefully you don't live in a community property state).

Best of luck to you - please come back and update us.

FiguringItOut

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Re: Feel like I'm too late to the game. Is there hope for me still?
« Reply #6 on: January 03, 2014, 09:12:32 PM »
It goes against the advice that many (most?) would give to someone who has debt, but if you are truly planning to be divorced in a few years, you need to be saving money for yourself and your kids, in an account that is in your name only and under your sole control. While you won't/shouldn't hide those assets during a divorce, the point is you need to have money that your husband can't unexpectedly cut off your access to. I escaped an abusive marriage several years ago (not saying that is your situation), and the only thing that kept me safe and on my feet was the money I'd saved for myself.

You also need to consult with an attorney sooner rather than later to work out a plan. You will have to collect an inventory of all of yours and your husband's assets and debts. This will take time. You also need a credit card in your name only, if you don't have one already. Don't go out of your way to pay debts or fund retirement plans right now - any progress you make could be undone in a divorce settlement. Get advice ASAP from a good attorney, and focus on accumulating liquid assets in your name only (hopefully you don't live in a community property state).

Best of luck to you - please come back and update us.

Thank you.  I will go see an attorney in the Spring.  Can't do that earlier.  Don't think it will change anything in few months time.  I am not in abusive situation or anything, so I don't have to worry about that issues.

Account in my name only and a credit card are good ideas.  I already have both, but don't use them as much.  Will see what I can do about that.  Meanwhile, accumulate as much savings as I can. 

the fixer

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Re: Feel like I'm too late to the game. Is there hope for me still?
« Reply #7 on: January 03, 2014, 09:23:48 PM »
Based on some off-hand knowledge I have about divorces, the way to make this the easiest for everyone is for it to be uncontested. Can the two of you come to an agreement on EVERY asset you both own? Custody of kids? That probably sounds like it will be difficult, so it's all the more reason to start now. Remember that you found this website, so you should be willing to sacrifice a lot of material things in negotiation because 20+ years is plenty of time to start over again. The more you can negotiate without getting lawyers involved, the better. Only if he's not being reasonable should you bring the lawyers in; that will cost you a bundle.

I still agree with the earlier advice about seeing an attorney, but just so you know what the law says you're entitled to. That should help form the basis of a negotiation.

Zamboni

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Re: Feel like I'm too late to the game. Is there hope for me still?
« Reply #8 on: January 03, 2014, 09:42:08 PM »
You've gotten some good advice here.  I agree it is imperative that you have some money in an account that you are absolutely sure you and only you can access.  You also need a detailed budget of what you need to live separately; research local rents, figure out how much you need for food for you and the children, etc.  All of this does take time, probably months, but it shouldn't take years.  If you are miserable and certain divorce will happen, then there's really no point in staying married just because you think you can't afford to divorce.  Debts and assets can be divided in a fair way at any time, the house should be sold if neither of you can afford it, and you can both make lifestyle adjustments, if needed (it sounds like you are already trying to do that but he is resisting . . . you probably won't make any head way if you stay together if that is the situation.) 

I know it's horribly painful now, but somehow I think your fears about what will happen are probably worse than the future reality of being apart.  The stress of staying in the same house if you both know the end is unavoidable can't be a good environment for anyone in the home.

If you are a reader, then I recommend the book Getting Divorced without Ruining Your Life.  I read a bunch of books and found this to be the most useful one from a practical perspective regarding preparing and finances.  Thinking about the children, I found the most useful book for me was Mom's House, Dad's House:  Making Two Homes for Your Child.

I wish you the best in your journey.

MrsPete

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Re: Feel like I'm too late to the game. Is there hope for me still?
« Reply #9 on: January 05, 2014, 03:57:59 PM »
You don't have the "anything is possible" options available to a brand-new college grad with no obligations to anyone but himself, but you can always better the situation in which you're in today. 

I'd suggest you start reading.  Go to the library and check out books on frugal living, books on investing, books on college costs for your kids, books on divorce.  The better informed you are, the better off you will be in the long run. 

Be prepared for things to get worse before they get better.  You're already having trouble with money, and when you separate for good, you'll have less than you have now. 

Put your kids first throughout this process.  Having been a child of divorce, I promise you, it's no picnic for them. 

RetiredAt63

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Re: Feel like I'm too late to the game. Is there hope for me still?
« Reply #10 on: January 05, 2014, 06:33:14 PM »
You really need to see a lawyer and see what laws apply in your location.  I am going through this in Ontario, Canada - money in your own account is still considered family property here, unless it came from either before the marriage, or from inheritance/gifts - if you make it and save it, it is still joint.  And if you do have an inheritance, once it is spent on the family, forget seeing any back. And if it gets put into a joint account, same thing, it is no longer yours, it is joint.   Same with family debts - they are family liabilities unless incurred before the marriage.  So if debts are an issue, my first reaction would be to pay down those with high interest and get the credit cut off so they can't balloon again.  Just because it is your spouse's credit card, without your name on it, does not mean you are off the hook for that debt.  So going to a cash economy might be safest.
Same with pensions - what was accumulated during the marriage is joint - legislation changed to protect spouses who did a lot of unpaid work in the family and then were left high and dry - working women, here, and a lot of farm wives (husband's family farm) who did major amounts of farm work and then saw nothing for all that work.  Rules may be different in your area.
If your husband is the spender, the sooner you split your finances the better.  This means a formal separation.   Also, if you have a formal separation, you can still be living in the same place - it is legally accepted that the two people may not have the resources to set up two places to live.  This means separate sleeping arrangements, obviously, and as much separation of your personal lives as possible.  No going to social functions as a couple.
Children and different incomes - the higher earner will be liable for more support - again, you need a lawyer.  Get the best one in your area - not only does this mean you have a good one, it means that is one your husband can't use.  And never share lawyers to save money.

Sorry if the comments above seem very negative .  Preparation for divorce is not easy, good luck.

frugaldrummer

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Re: Feel like I'm too late to the game. Is there hope for me still?
« Reply #11 on: January 05, 2014, 09:24:11 PM »
I would not wait to consult an attorney. You may be saving up money only to find you have to split it with your soon-to-be-ex.  Or you may find you're better off to file now (and get support based on your current income) than to wait until you have a better job (and will get less support). Or your H may be running up credit card bills behind your back that you will be stuck owing half of.  Many attorneys will have a free first consultation. 

happy

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Re: Feel like I'm too late to the game. Is there hope for me still?
« Reply #12 on: January 06, 2014, 04:44:35 AM »
Quote
The thing is, I feel like I am too late to the game and I will never accumulate a significant amount of wealth to be comfortable.

If you learn the core of mustachianism: that is, how to be happy living with low expenses, then its almost never too late.  And certainly not at 38 or even 41 if it takes you 3 years to sort out the divorce.

If you can keep a high savings rate, then continue to live the same lifestyle in an ongoing fashion generally you can be done in under 10 years, if you don't start with debt. See http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ A savings rate of 65% will see you done in 10.5 years. I guess it depends on how you define "significant amount of wealth" and "comfortable", and  "too late"....



lizzzi

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Re: Feel like I'm too late to the game. Is there hope for me still?
« Reply #13 on: January 06, 2014, 05:25:13 AM »
I agree with Retired at 63 and with frugal drummer. You need to see an attorney right away, and start planning from there. Try for one with a free first consultation. If you can't find one, or if the one you want to use charges a consult fee…and if you have the wherewithal to save some money, you need to use some of it up front for your consultation. I've been there and done that. I don't even believe in divorce--the "D" word doesn't even exist in my vocabulary--but I divorced in 1995 because there was simply no other choice --and my life went from black-and-white to technicolor. I never would have thought that such happiness would find me.  I was afraid to get divorced…life after divorce just seemed like a big, terrifying black hole…but that was not the case at all. I would never say that getting divorced should be the focus of our aspirations, but I just want you to know that life does go on, and can even be astonishingly better.

Ms Betterhome

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Re: Feel like I'm too late to the game. Is there hope for me still?
« Reply #14 on: January 08, 2014, 05:44:53 PM »
I divorced in my mid-thirties and was absolutely broke, and empty-handed. I really didn't handle my money well in the first few years post-separation, which madel my live a LOT harder than it needed to be. I'm now 46, and definitely unlikely to retire 'early', but i would say that not just understanding, but managing my finances has had immeasurable benefits for my peace-of-mind.

I now have a gorgeous, frugal life-partner, and no debt aside from my mortgage ( which We're paying down as fast as we can). So I would say you're never to late in the game... your game is just played according to slightly different rules!

YK-Phil

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Re: Feel like I'm too late to the game. Is there hope for me still?
« Reply #15 on: January 08, 2014, 06:42:25 PM »
Others have given you some very good advice, particularly about seing a lawyer as soon as possible to get a full understanding of your obligations in case of a divorce, so I won't elaborate. All I can say is that you are not too late in the game, because wealth is a very relative concept. One can be fully happy and wealthy and live a rich and full life with little money and possessions, and what matters is to focus on the important things in life, which are actually not things, but people and experiences.