Help me keep my finances together post divorce

[Anonymous]

Not sure if I should factor this in but I’m still pretty young. I’m in my 30s, and I still have quite a bit of job growth ahead of me. I’m slated for promotion in this coming quarter and it will come with a pay bump along with an increase in my target bonus from 15-17% of base to 25-30% of base. I didn’t factor any of that in yet because I’m trying not to count my eggs before they hatch. But, this forum is brutal- so, does that make anyone more optimistic for me?

I swear, I’m not keeping the house on my own for fun. If any of you know about the ridiculous school redistricting that has been going on here in N Arlington you’ll appreciate that I have one kiddo entering MS next year, and he looks different from other kids. I need to keep him in his school to keep him with his friends.

[Anonymous]

Few divorced couples I know could afford to keep the house in this area. You are effectively supporting two households on the same income you were previously only doing one. It is a big hit. I'm sorry op I would sell, bank the money and rent downsized in your school district till you can build that nest back up, especially with college costs coming soon. Also note your ex can file for amount adjustments once your Rsu's come in and you may be required to give him more support.

[Anonymous]

Anonymous wrote:OP here. I included life insurance in my bills. I’m pretty sure I can pay off that CC in just a couple of months. I get hives from debt, so I imagine that will be gone soon. Do that leaves the mortgage and the student loan. I’ll keep driving the paid off car as long as I can. No vacations, very little eating out, no shopping. I really want to make this work for my kids. At least for the next few years I want them to have something that *isn’t* changing for them.

Yes, I could rent out my basement. There’s a full wet bar down there with a dishwasher, full bath.

I get the desire to not uproot the kids, but after you get through this first transition, you should give moving some thought. As your kids get older, they might rather have some $$ for taking vacations, eating out, activities, etc vs. living the big house. I have a friend who moved from the big pre-divorce house into a smaller house after several years, and she says she should have done it earlier.

[Anonymous]

Anonymous wrote:Few divorced couples I know could afford to keep the house in this area. You are effectively supporting two households on the same income you were previously only doing one. It is a big hit. I'm sorry op I would sell, bank the money and rent downsized in your school district till you can build that nest back up, especially with college costs coming soon. Also note your ex can file for amount adjustments once your Rsu's come in and you may be required to give him more support.

+1

[Anonymous]

Anonymous wrote:

Anonymous wrote:Few divorced couples I know could afford to keep the house in this area. You are effectively supporting two households on the same income you were previously only doing one. It is a big hit. I'm sorry op I would sell, bank the money and rent downsized in your school district till you can build that nest back up, especially with college costs coming soon. Also note your ex can file for amount adjustments once your Rsu's come in and you may be required to give him more support.

+1

No, he can’t. It’s in our agreement that they’re mine. The marital share of the invested units wasn’t enormous and he traded the future value for present cash. So, I’m safe from that. That said in a few years he can ask for more child support just for general material change in circumstance stuff, but he most likely won’t have any idea about my bonus increase.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Few divorced couples I know could afford to keep the house in this area. You are effectively supporting two households on the same income you were previously only doing one. It is a big hit. I'm sorry op I would sell, bank the money and rent downsized in your school district till you can build that nest back up, especially with college costs coming soon. Also note your ex can file for amount adjustments once your Rsu's come in and you may be required to give him more support.

+1

No, he can’t. It’s in our agreement that they’re mine. The marital share of the invested units wasn’t enormous and he traded the future value for present cash. So, I’m safe from that. That said in a few years he can ask for more child support just for general material change in circumstance stuff, but he most likely won’t have any idea about my bonus increase.

He doesn’t need to know about the change. You just have to provide your W2s and the new total comp will be accounted for.

[Anonymous]

I don’t see the need to rush things. Give it 6 months and then see where your finances stand. I’m sorry you are going through this.

[Anonymous]

Anonymous wrote:I never wanted to land here, but here I am. I am the higher earning spouse, so I have the greater ability to keep the house to keep the kids in their neighborhood and school. But, it’s going to stretch me in the next year.

HHI: $215k (my salary and bonus)
Net worth: $355k (my investments and half of the equity that’s left)

Cash flow: everything is kind of decimated post divorce. I used to have no CC debt and a healthy savings account. Not so much now.
Savings account: $5k
CC: $5k in debt in leftover lawyer fees
Student loan: $33k
No car payment
Mortgage: $1,073,000

Monthly expenses:
Mortgage: $5,600
Childcare: $600
Child Support: $478
Bills/Cell Phone: $540
Car/Insurance/Gas: $200
Student Loan: $300
CC Payment: $300

Starting in 2020 I have RSUs vesting that give me big chunks of money that I can pull from but this year is going to be hard. Any hints or tips for getting through this year? Should I stop contributing to my 401k for the year (currently contributing 6% for a 6% match which vests immediately)? This is a brand new divorce- I haven’t started living without my kids half time yet (starts next week), so are my bills going to go down, and I just haven’t realized it yet?

The sum of all your above expenses is $8,000.

Your monthly income after tax deductions is $12,000. (80% of 187K (assuming $215K is salary + 15% bonus). Unless I'm missing something, you should be able to make it work.

Rent the basement - That adds another $1,200-$1,500 to your monthly income.

Keep a tight lid on spending for a while until you get a grip on spending/budget.

Here are the positives:
- You are young
- You have additional income in the horizon with the promotion and increased bonus
- RSUs vesting
- Your positive attitude. You sound like like the kind of person whose income will grow with time.

Make sure you plan for childcare (if applicable) since you are now a single mom and may need to work long hours.
make sure you have life insurance to cover the cost of the house, college etc for the kids
If you have the slightest doubt in your mind, sell the house now when the market is still high.

Good luck!

[Anonymous]

How do people with money rack up this kind of debt?? I’m a nanny and my home is paid off. I bought what I could afford. You need to seriously cut back on everything. So much debt. Live like a pauper for a year and then you’ll be debt free.

[Anonymous]

Anonymous wrote:How do people with money rack up this kind of debt?? I’m a nanny and my home is paid off. I bought what I could afford. You need to seriously cut back on everything. So much debt. Live like a pauper for a year and then you’ll be debt free.

Not helpful at all.

[Anonymous]

Rent out a basement. Rent every bedroom in the house. A women I used to rent a room in her house, was recently divorced with 2 kids and her ex was unemployed for over a year. She and her two daughters sleep in one small room. Rent out another two bedroom and a master for 300-500$ monthly. Each month she makes about $1200 from the rental income.

[Anonymous]

Anonymous wrote:How do people with money rack up this kind of debt?? I’m a nanny and my home is paid off. I bought what I could afford. You need to seriously cut back on everything. So much debt. Live like a pauper for a year and then you’ll be debt free.

This is making me laugh. She has a crazy mortgage but other than that almost no debt. Seriously not a helpful comment.

[Anonymous]

Anonymous wrote:

Anonymous wrote:How do people with money rack up this kind of debt?? I’m a nanny and my home is paid off. I bought what I could afford. You need to seriously cut back on everything. So much debt. Live like a pauper for a year and then you’ll be debt free.

This is making me laugh. She has a crazy mortgage but other than that almost no debt. Seriously not a helpful comment.

[b]

She has a 1million dollar mortgage. The only crazy person here is OP. That’s not debt???

[Anonymous]

Anonymous wrote:

Anonymous wrote:How do people with money rack up this kind of debt?? I’m a nanny and my home is paid off. I bought what I could afford. You need to seriously cut back on everything. So much debt. Live like a pauper for a year and then you’ll be debt free.

Not helpful at all.

[b]

Not helpful... how? I paid off my home in 5 years by living like a pauper/taking side jobs and now I’m debt free. But keep rolling your eyes. Don’t get a 1million dollar mortgage if you want to be able to pay your bills. That just seems like math to me.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How do people with money rack up this kind of debt?? I’m a nanny and my home is paid off. I bought what I could afford. You need to seriously cut back on everything. So much debt. Live like a pauper for a year and then you’ll be debt free.

Not helpful at all.

[b]

Not helpful... how? I paid off my home in 5 years by living like a pauper/taking side jobs and now I’m debt free. But keep rolling your eyes. Don’t get a 1million dollar mortgage if you want to be able to pay your bills. That just seems like math to me.

She values education. N Arlington isn’t cheap.

Do you live in a 200k home? Even that seems difficult to pay off in 5 years on a nanny income.