After your divorce, getting along at the holidays can be a stressful situation when you have kids. On top of trying to work out holiday visitation schedules and travel plans, you may also be worrying about what to get your kids. You might not have the resources to buy things like you did before the divorce. Maybe you have the resources and your ex doesn’t or vice-versa. So what do you do about those big-ticket items that your children have been eying since September? Being divorced brings on divisions over gift giving. Set aside some time with you ex, meet for coffee and talk about what your child wants or would like as gifts, and divide up the list, so you’re not duplicating each other and know what the other is buying. Also discuss whether or not a gift will be left at one parent’s house or if it can travel back and forth. If you have a hard time sitting down and talking in person, do it by email or phone. Sometimes it’s easy to ignore or “cross that bridge when we get there” but setting gift giving boundaries ahead of time creates less drama later on. It’s all too easy for the holidays to become a competition, to see which parent can buy the most stuff, the best stuff, or the most expensive stuff. Even parents that are great at co-parenting can fall victim to this game. You and your ex have to make sure this doesn’t happen to you and your child(ren). That behavior takes the focus of the holiday away from your child and spending time together. If one of you buys your child a puppy, a new video gaming system, and a big-screen TV and the other buys a few toys, feelings are likely to be hurt. The spouse who buys the big gifts often does not realize he or she is hurting the other parent and thinks they are simply making the child happy. However, if you’re the spouse who doesn’t splurge, you might end up feeling like you’ve failed your child or she will love the other parent more. Avoid this situation but having that gift giving conversation ahead of time; set a dollar limit or range if you need to. Holidays are hard. It’s important to remember the reason for the season, no matter what holiday you are celebrating. Try to focus yourself and your child on the fact that the holidays are not all about gifts. Spend time together doing holiday crafts, going to services, going to a concert, decorating your home, or baking. Check into age appropriate volunteer opportunities at a local shelters to serve meals to the homeless, packing shoe boxes for children overseas, or volunteer to wrap presents for needy children. Take your child shopping to buy a small gift to give the other parent. 20 years from now your child won’t remember which parent bought them the most gifts, so use this opportunity to show your child that giving back to others is more rewarding than receiving gifts – a life lesson they will remember for years to come.
The holiday season is upon us with all of its beauty, tradition and unreal expectations. It can be a stressful time for even the most grounded person. For someone newly divorced and still sorting out their new life, the challenges that the holiday season imposes can add a whole new level of stress if one doesn’t meet those challenges head on. It’s the financial impact of the holidays that we want to address today. Buying presents, decorating and entertaining can put a big hole in your budget if you are not careful. It can turn out to be a holiday hangover that lasts until summer. Meet the holiday spending challenge head on by getting a grasp on how much you can reasonably spend above and beyond your normal day-to-day spending. Follow that up with a holiday spending worksheet listing all the added expenses, including presents, cards, decorations, groceries, clothing, charitable donations, travel and dining out. Divide up your holiday spending dollars amongst the items on your list. Now, prioritize your spending by putting the most important holiday items at the top of your spending list. Focus on purchasing the high priority items first. If high priority items, like presents or travel expenses, end up costing more than you budgeted, you will need to cut back on the low priority items. When it comes to presents, the holidays call for cooperation rather than competition. Trying to outdo your ex-spouse, particularly with the presents, is only going to add to the holiday stress. Share with your ex-spouse what you intend to buy and the things you know your child wants. Since it is likely that your child is going to celebrate Christmas twice, each spouse might want to agree to buy smaller items. If your child just has to have a really expensive item, considers splitting the cost. This is your opportunity to make new traditions. Look for ways to celebrate the holidays that focus on togetherness rather spending. Making cookies and homemade decorations, or helping out a charity, can all be done for minimal cost while instilling what the spirit of the season is really about. Avoid the holiday blues by approaching them with the right attitude. Look on the bright side, now is your chance to get rid of those awful holiday traditions of your ex-spouse. Here is your chance to start new traditions that truly reflect what you value and what you want your family to remember for years to come.
This time of year (between Thanksgiving and Christmas/Hanukkah) can bring extra challenges for couples going through divorce. Here are some things to keep in mind if you are in the middle of the process.
- Focus on the positives. Even though there may be conflict and pain, keeping a positive outlook and good attitude can help the holidays feel less tense. Fake it if you need to – sometimes the “pretend” attitude will actually make things feel easier.
- Keep the children out of the conflict. If you have children try and make the holiday special for them by avoiding conflict. If you need to work with a counselor or child specialist in order to make it through the holiday, do so. Whatever you can do to make the children feel special will is important for their well-being.
- Take part in tradition if you can, otherwise, bow out gracefully. Take part in traditions and family events if you can comfortably. Sometimes, the discomfort is too great. Instead of fighting through it, you can avoid the conflict and let people know “I am not comfortable attending, but wish you all the best.”
- Remember how you spend this holiday does not need to be precedential for future holidays. Talk to your attorney or family specialist on parenting time schedules and holiday planning. While you are In the middle of the process, you may agree to temporary parenting schedules to try out certain arrangements to give the children consistency during the process. More permanent arrangements can be made later.
- Find comfort in your spiritual beliefs. If you are religious or have a faith-based practice, utilizing those resources and beliefs can be helpful in difficult times. Sometimes thinking about the meaning behind holidays can be more meaningful and enjoyable, than the celebrations.
- Set new traditions. The holidays during a divorce may be the first opportunity to try new things. Maybe it is the first year you cook the turkey or maybe you start a new Christmas Eve tradition if your parenting schedule allows for it. This may be an exciting opportunity.
- Be kind. Whatever your religious beliefs, holidays are often about love, kindness, and celebration. Spreading cheer may help you to feel better and may make the world around you a little brighter. Such positive energy may be just what you need to get a lift during the holidays.
According to a Holiday Consumer Spending Survey by Consumer Affairs the average person celebrating Christmas, Kwanzaa and/or Hanukkah will spend $804.42 on gifts this 2014 holiday season. If you are separated or going through a divorce, chances are that figure is simply not feasible for you. The good news is, that is just an estimated average, and for the most part completely unnecessary. The holidays can often be a budget breaker – but they don’t have to be! Saving for the holidays should not start on black Friday! Develop a budget that accounts for gift giving year round. Consider all the holidays, birthdays, and any anniversaries that you typically choose give for. If you have kids, once they are in school they will likely get invited to many birthday parties. You should also account for these occasions and develop a system that works for your budget to allow your child to take a gift to the party. Whether that means stocking up when a popular age-appropriate gift goes on sale, or just having the room in your gift budget to account for these gifts. Often times these party invites may come with less than a week’s notice. Being mindful of your gift giving budget will help you not to blow $50 on a gift on a whim. When you were married, and probably had more disposable income, you may have fell into a gift giving routine that included birthday and Christmas giving to you friends and neighbors and their children. Decide where your gift giving priorities lie, and don’t feel guilty being straightforward and setting lower expectations with people. Giving makes people feel happy, and if that’s the case for you, you don’t need to completely cut back. Look for ideas on Pinterest – handmade gifts go a long way. Find a fun quote that fits your Mom/Aunt/friend/etc., print it off, and put it in a dollar store frame, viola! Dust off a bottle of wine to give to your wine loving friend. Go on a nature walk, find some pine cones and create a holiday wreath. If you like to can foods in the fall, make jam, or bake, those goodies make wonderful gifts! Turn your children’s old broken crayons into brand new fun shapes with the help of inexpensive molds. Find clip art online and create a personalized children’s coloring book using the child’s name throughout the book, which you can print off at home. The possibilities are endless, and inexpensive, handmade gifts don’t look “cheap,” they look thoughtful!
Over the next couple months, I will discuss the various dimensions of Social Security. So many people look at the Social Security program as the simple process of going in to the Social Security Office to claim benefits sometime after age 62, when they decide to stop working. This is putting the cart before the horse in that they have not factored Social Security’s impact on their retirement cash flow into their decision of when to retire. The Social Security program has a complex set of rules that if understood, can influence the when-to-retire decision and a person’s retirement lifestyle. First the basics, let’s say someone owes you money and they have agreed to pay you a certain amount at a defined time in the future. For your benefit, you and this person also agreed on some leeway in these terms – a sliding scale for getting your money earlier or later than the agreed upon date. If you called as soon as the agreement allowed and said that you wanted your money, they only have to pay you 75% of the agreed upon amount. If you tell them you want them to pay you at the very latest date then they will pay you 32% more than agreed. When you get your money back really depends on when you need it. If you find yourself in a financial bind you will likely ask for it early and accept the discounted amount. If you don’t need it at all, you may be happy to wait until the very latest to get the surplus. Social Security works in a similar manner. The agreed upon amount is your “Primary Insurance Amount” (or PIA). The date upon which you will receive 100% of your PIA is what Social Security calls your “Full Retirement Age” (or FRA). Everybody retiring now has a FRA is between ages 66 and 67. Anyone born after 1960 has a FRA of 67. As long as a person works and pays Social Security taxes for 40 quarters (10 years) they are eligible for the standard PIA based on how much they paid in over the years (survivor benefits and disability benefits are a whole other discussion). Social Security has a sliding scale like our loan example, if you want your benefits before your FRA, then you may get as little as 75% of your PIA. If you wait until age 70, you are entitled to get 132% of your PIA. Whether in a financial bind or not, the most popular age for starting to receive social security benefits is 62 – the earliest age possible for most people. Approximately 32% of men and 38% of women begin receiving benefits soon after they reach 62. The average age of when people apply for benefits is 64 so the majority apply for benefits before their full retirement age and accept some degree of reduced benefits. Only 2% of applicants wait until age 70 to get the greatest benefit possible. Some might have a legitimate financial need to apply early, but many are probably just tired of working and want to start retirement as soon as possible. For whatever reason, it would be safe to say that there are a lot of people out there not putting much thought into when they begin to receive benefits. This is unfortunate because unlike the loan example where only one payment was made, Social Security pays month after month. The decision to start receiving benefits early or late is therefore reinforced every month. Many people depend on Social Security for a significant part of their retirement income and as such, the level of their benefit greatly influences their retirement lifestyle. In my next blog entry we take a look at the impact of claiming benefits before one’s FRA.
This time of year, it is often important to consider the tax implications of filing for divorce. In both federal and state taxes in Minnesota, you cannot file jointly if you are divorced before the end of the year. If your divorce is finalized in 2014 (signed off by the Judge, not just filed), you are deemed divorced and can only file separate, individual returns. If you hold off and divorce in the beginning of 2015, you can still file jointly for 2014. Everyone’s financial situation is different. Whether or not it is financially beneficial to file jointly or separately in any given year varies with each couple. However, some things to consider regarding taxes include:
- Spousal maintenance payments (deductible to the payer and income to the recipient)
- Distribution of any investments or retirement distributions are often taxable
- Property taxes and interest on mortgages may be shared or their benefit maximized with one or the other claiming the deductions
- If filing separately, status of Head of Household or Single may impact the tax burden
- How to utilize dependency exemptions
I find that what my clients want most is to return to a happy, peaceful life. Divorce is a place of upheaval with many unknowns. Will my kids be okay? Where will I live? Will I be able to make ends meet? Will I ever be able to retire? These questions and more interfere with the normal rhythms of life. The fear and anxiety of not knowing the answers cause distraction at work and sleeplessness at night. How can peace of mind be restored? A good place to start is the practice of acceptance. By acceptance I mean merely acknowledging what is, without judgment or wanting it to be different … without resistance. Whenever you find yourself feeling a negative emotion such as anger or frustration, it is likely you are resisting an external circumstance … wishing that something or someone were different. While it is natural for human beings to resist the unpleasant, a lot of time and energy can be spent trying to control external circumstances beyond our control. Acceptance is merely acknowledging those circumstances and allowing what is in life to be as it is, without judging it as good or bad, or wanting it to be different. Practicing acceptance can help you let go of the pain, stress, anger and anxiety that inevitably accompany divorce. Here are a few reminders:
- Acceptance does not mean giving up. Empowered action comes from a place of clarity and serenity.
- You can’t change other people, but you can change your response to them. While what your former spouse or partner thinks or feels is beyond your control, your mindful response to a situation can have a powerful effect.
- Resistance can get in the way of solutions. The inner stillness that comes with acceptance enhances your openness to previously unseen possibilities.
The secret to a constructive and respectful divorce is to start at the end and work backward. Ask yourself, “What do I want my life, my spouse’s life, and my children’s lives to look like when the divorce is all over? What is my vision for the future?”In fact, the first task of clients who choose a collaborative divorce process is to answer these questions and to share their answers with each other. Here are some of their answers: Couple A
- Children/Family We want our children and ourselves to feel that we are a family that loves and cares for each other.
- Relational We want us to look back on this difficult time and be proud of how we handled ourselves and each other. We want both of us to be happy in the future.
- Financial We want our final agreement to ensure equitable life styles and standards of living. We want our final agreement to provide financial security for both of us in retirement and in the event of the death of either of us. We want our final agreement to respect the financial decisions/intent of our respective families to leave us money.
- Process We want a divorce process that supports a positive future. We want a divorce process in which we both feel heard and safe to discuss difficult issues. We want to be comfortable with our final agreement and to have a mechanism for implementing it. We want our divorce process to be cost effective and efficient. We want to minimize the emotional and financial stress of our divorce.
- Children For our son to have a solid, cohesive parenting team who loves him. For our son to be shielded from the negative aspects of the divorce.
- Financial For both households to have financial stability and security. For us to be debt-free by using an intentionally controlled plan of action.
- Relational/Emotional That we create a trusting relationship with each other and the potential for friendship. That we reduce the emotional and financial stress we feel as a result of our divorce.
- Process That the collaborative process be as cost-effective as possible while obtaining the added value that our neutral professionals bring to the process.
- For our children not to feel divided.
- For our children to feel comfortable with both of us.
- For us to convey a sense of harmony to our children.
- To have financial security for both of us.
- To get along with each other after the divorce; to have mutual respect for each other; and to have a pleasant relationship.