Having the wrong financial mindset is not just bad for your mental health, it can also have long-term negative effects on your financial health as well. In this article, we will breakdown some common financial beliefs that are blocking your opportunity to create long-term financial security as you make crucial decisions about money during the divorce process.
Ready to let go of the money mindsets holding you back? Keep reading to find out if you’re following money myths or truths.
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Toronto’s Experts in Family Law
Myth 1: Money is the root of all evil.
If you grew up in a religious household, you may have heard this sentiment at some point.
Truth 1: Money is energy and depending on how it is being used, it can be good or bad. The fact is, we all need money to live and pay our bills. You will need it to live after your divorce is finalized.
Myth 2: It’s not polite to talk about money.
As a society, we are more comfortable talking about sex than we are talking about money.
Truth 2: Unfortunately, not speaking about money especially before marriage, may mean we do not learn anything about our partner’s attitudes, spending habits or credit history before we have already tied the knot. This often spells trouble for the relationship, since one of top reasons people divorce has to do with having different approaches to how they manage their money. Consider financial intimacy to be as important to the relationship as sexual intimacy when searching for a long-term partner.
Myth 3: You have to work really hard to make money.
Chances are, your parents or grandparents did more physical labour than you to earn their income. However, if you are in the workforce today, you are more at risk of losing your manual labour position to a robot. With the rapid growth of technology and artificial intelligence, most jobs that once were done by people may become extinct in the very near future.
Truth 3: Invest in yourself and make money work for you.
Women are likely to earn less than men, and the less skilled you are, the more likely you will be vulnerable to the changing needs of the workforce. Invest in yourself and your skills. This could include upgrading your skills to make yourself more employable so that you have the potential to earn more money and find more opportunities in your field of choice. Making money work for you means working smarter for it – not harder.
Myth 4: I just don’t understand money.
Women report worrying about many money decisions. As a result, some women will give up their financial power by not getting involved in the financial decisions made in their household. This leaves them vulnerable to financial abuse, especially during a divorce. They may not know where the family’s money is located, or worse, become surprised to learn that the family finances have been squandered.
Truth 4: I can learn to confidently make money decisions.
Women now control $2.2 trillion of wealth in Canada, and that number is expected to rise by 70 per cent over the next decade. At that point, women will directly control more than 33 per cent of Canada’s wealth. However, no matter how wealthy woman are, they cannot afford to abdicate their financial responsibilities (especially as more women become single by chance due to a divorce). The good news is there are plenty of resources available to help women who want to become more confident around money. This includes books, newsletters, and online tools for money management. Check out https://www.getsmarteraboutmoney.ca/ if you want to get started.
Myth 5: I am ashamed of my finances so I don’t want to deal with it.
The divorce settlement revealed that your partner made many mistakes in managing the family’s money. You were not kept in the loop. You now realize you are in debt and do not feel hopeful about your finances or about what the future holds for you. You would prefer not to deal with your finances and just want to bury the whole thing under a rug.
Money Truth 5: It’s important to do the math.
Become intimate with your numbers. Figure out how much debt you are in, how much you will need to pay your bills, and what you will need for retirement.
It may be scary to start this process, but don’t be afraid to seek help from a professional planner. They can partner with you to figure out strategies to pay off debt sooner and make the most of the finances you have now. Knowing your numbers will give you the confidence to make better decisions and sleep better at night… You’re worth it!