Avoiding Costly Mistakes in Divorce with Nikki Tucker | Ep. 331
On today’s episode, Tiffany Grant is joined by Nikki Tucker, a Certified Divorce Financial Analyst (CDFA), to discuss common financial mistakes to avoid during a divorce. Having recently gone through a divorce herself, Tiffany finds Nikki’s insights timely and invaluable. Together, they explore vital points such as the importance of organization, balancing reliance on attorneys, and understanding your financial position post-divorce.
About our Guest
Nikki Tucker, a Speaker and founder of The FIIRM Approach, is known as a problem solver since her experience and her time involves helping women strategically exiting their marriage and work on their new financial life post-divorce, as a Personal Financial Strategist.
As a 20+ year financial professional, she firmly believes that all women deserve financial security and she enjoys teaching new ideas about money, and reinforcing sound ones. Nikki finds joy in connecting her clients to great resources to help them gain clarity, confidence and control of their finances through live workshops and digital resources.
Connect with Nikki
Website: https://thefiirmapproach.com/
Instagram: @thefiirmapproach
Facebook: The Fiirm Approach
Connect with Tiffany
Website: https://www.moneytalkwitht.com
Facebook: Money Talk With Tiff
Twitter: @moneytalkwitht
Instagram: @moneytalkwitht
LinkedIn: Tiffany Grant
YouTube: Money Talk With Tiff
Pinterest: @moneytalkwitht
TikTok: @moneytalkwitht
Key Discussion Points
Getting Organized
- Nikki emphasizes that one of the biggest mistakes is not being organized during a divorce. While organization doesn’t have a direct monetary cost, it impacts the overall cost and timeline of the divorce process.
- Having documents related to assets, especially your home, organized is crucial for smooth negotiations.
Over-Reliance on Attorneys
- While attorneys are valuable, relying on them for every minor issue can quickly become expensive. Nikki suggests incorporating other support systems, such as therapists, divorce coaches, or a CDFA, to handle certain aspects of the divorce process more cost-effectively.
Understanding Your Financial Position
- Understanding that your household income and financial dynamics will change post-divorce is imperative. Knowing your expenses relative to your income and planning accordingly is crucial.
- Emotional decisions can cloud financial judgment; having a clear financial strategy helps make informed decisions.
Certified Divorce Financial Analyst (CDFA)
- Nikki explains the role and importance of a CDFA in the divorce process and how they can help ensure a financially fair settlement.
Quotes
- “The biggest mistake that people make is not getting organized, and it doesn’t cost you anything.” – Nikki Tucker
- “There needs to be a lot of awareness and information gathering that you are doing to understand what your financial position is.” – Nikki Tucker
- “Having your stuff together makes you feel much better about it, and when you can pay more attention to the numbers, you’re ahead of the game.” – Nikki Tucker
Resources
Everything You Need To Know About Prenups (And Why You Should Get One) | Ep. 240
Money After Divorce with Krista Goodrich and Grace Everitt | Ep. 19
The Divorce Money Guide with Tracy Coenen | Ep. 138
Conflict Management with Rhonda Johnson | Ep. 47
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Copyright 2024 Tiffany Grant
Transcript
You know what it is. That's right. It's time to talk money with your money
Speaker:nerd and financial coach. Now, tighten those purse strings
and open those ears. It's the money talk with Tiff
Speaker:podcast.
Speaker:Hey, everyone. I am so excited because I have Nikki Tucker on the line,
and Nikki is going to talk to us about financial mistakes to avoid
Speaker:when going through a divorce, which is so timely. If you've been following
Speaker:me, I just finalized my divorce this year. So,
Nikki, where have you been?
Speaker:Clearly not in the right place.
Speaker:But. I'm glad we're here today. So thank you for having me. Yes, and
it's all good, because hopefully we can help someone else. So let's just
Speaker:hop right in for the audience. What is one financial mistake we
Speaker:need to avoid when we're going through a divorce? Such a great question.
And one of the things that I love to talk about, because
Speaker:when we talk about financial mistakes, generally
Speaker:people are thinking about, like, hard dollar amount mistakes,
things that are coming directly out of your bank account. And that can be
Speaker:true, but there are also some things that you're doing that have
Speaker:connection to your money and just not directly coming out
of your bank account. And I'll explain what I mean in a second. So,
Speaker:one of the biggest mistakes that people make when they're
Speaker:divorcing is not getting organized. And the
reason I say it's the biggest mistake is because it doesn't
Speaker:cost you any money to get organized. So that's what I mean about that, like,
Speaker:direct connection. There is no absolute dollar value coming out of your
bank account. However, we know that
Speaker:there's a connection between time and
Speaker:divorce. So the longer your divorce takes,
the more it will cost you. The less
Speaker:organized you are, the. The more it will cost
Speaker:you, because the longer it will take. So the
biggest mistake that people make is not getting organized,
Speaker:and it doesn't cost you anything. Oh, my gosh. I
Speaker:totally agree with that. And luckily, that was one thing that I did do.
Right when I went to my lawyer, he was like,
Speaker:oh, my gosh, you're so organized.
Speaker:But luckily, I had everything in order in that
regard. But I will say that equitable distribution
Speaker:paperwork, even with. With my stuff in order, was a lot. It's a beast.
Speaker:Yeah, it's a beast. Yes. So let's talk about that real quick. So,
when we're talking about getting organized, right, what are some things that we need to
Speaker:do and have in order? It's really important
Speaker:for you to understand what you're fighting for, because
normally divorce is not it's not
Speaker:a fun experience. Okay. It could be amicable where you're just
Speaker:agreeing that it's fair for the relationship to end. It's run
its course, and in other instances, it's very
Speaker:contentious. So either way, because the emotions and
Speaker:everything involved is not a fun experience. So
when you're thinking about how do we get organized, what
Speaker:decisions, what documents do you need? What should you be looking
Speaker:for? That's why I made the point about understanding what are you
fighting for? What's important to you? And then noting
Speaker:that the things that are important to you will likely be
Speaker:equally or almost as important to you as they are to
your partner, your soon to be ex. Which means that
Speaker:you're going to have to give a little bit. You're not going to get everything
Speaker:you want. Unfortunately, it's the hard truth. And so before you
begin any negotiate negotiations, you have to determine
Speaker:what your priorities are and what your areas of threat
Speaker:are that may literally cost you money. So let's take
your house as an example. Getting together the
Speaker:paperwork associated with your home is important
Speaker:and may be low hanging fruit. So an example would
be, did you have your home appraised recently? Do you
Speaker:have the original documentation information
Speaker:associated with your home? Have you had any repairs recently?
Is it necessary for your home to have some repairs if
Speaker:you're deciding that you want to stay in the house? So what
Speaker:I mean by that, if we just stay on the property, because that's usually the
biggest asset that people have, is if there are repairs
Speaker:that are necessary. One, have you had an inspection to
Speaker:determine the cost of those repairs? Two, will your spouse
split the repairs with you? The cost of the repairs if you're
Speaker:staying in the home versus if you're selling the home, what are the items that
Speaker:require immediate attention? Okay, so that's one piece of the
repair side. If you want to stay in the home,
Speaker:then you may have to refinance it. If the home is in both of your
Speaker:names and your spouse decides that I'm moving out,
so I don't want it in my name. Now you need to refinance. So then
Speaker:you have to have your paperwork associated with your income
Speaker:to be able to provide proof of income to your bank
or whomever is providing the financing for your mortgage or the refinance.
Speaker:You also have to provide information on your bank statements and
Speaker:your bank accounts, your investments. So those are like some of the
basic things. Generally speaking, we're thinking about your biggest asset.
Speaker:So the paperwork associated with your home or documents
Speaker:related to things that need to be done with your house and then paperwork
associated with you getting approved for a mortgage
Speaker:if you want to stay in your home and they're all connected.
Speaker:That is such a good point, because one thing I learned the hard
way was cause I had my house before I got
Speaker:married, but I wanted to take advantage of the low interest rate environment
Speaker:we had a few years ago, and so I refinanced,
and that put my then husband on
Speaker:the paperwork. And so when we had to
Speaker:undo everything, that was one thing that had to be undone as
well. And so that's something that I was not
Speaker:aware of. You know, prior to, well, prior
Speaker:to refinancing and doing that whole process, it
changed some of the paperwork on my house, let's just put it that way. And
Speaker:so I do want to forewarn people with that as well, since we're
Speaker:talking about houses and marriages and divorce, that if
you have your house ahead of time and you end up refinancing while you're married,
Speaker:that then puts that person on it as well. So, anywho,
Speaker:let's go into number two. Number one was
not getting organized and making sure we have all of our ducks in a row.
Speaker:What would you say the number two financial mistake we make when
Speaker:getting divorced? Too much of a reliance on your
attorney.
Speaker:And as a CDFA, I
Speaker:have a great, sincere appreciation for
attorneys and the work that they do and the value that they add. And I
Speaker:truly believe that they do add value. In a lot of divorce cases.
Speaker:However, constant emails, constant phone calls,
office visits, virtual Zoom calls, whatever it is with your
Speaker:attorney can add up very quickly. You can go through that
Speaker:retainer much faster than you thought you would. And it's
important for people to understand that when
Speaker:you're going through a divorce, you need support, no question about it.
Speaker:So you can build a bench that will allow
you to have the support that you need and not put such
Speaker:a heavy emphasis on your attorney for everything. When you
Speaker:guys get into an argument, for example, because you're sitting at the dinner table
and you're trying to negotiate and you're trying to come to an agreement, and let's
Speaker:just say they piss you off, your attorney probably doesn't need to
Speaker:be the first phone call when that happens. Okay? But a therapist
could be the first phone call or first email or a divorce
Speaker:coach or someone that can, again, provide
Speaker:value to you and the support and guidance on
how to handle situations that maybe you've never faced if you've
Speaker:never gone through the divorce process, but at a much cheaper
Speaker:rate than what your average attorney will charge you,
baby. That is a gem right there because
Speaker:it adds up so quick. And I just told my attorney the other day
Speaker:that they need to stay out of my pockets. And apparently, apparently I'm in the
wrong line of business because it gets very
Speaker:expensive very quickly. You know, you think once you pay your
Speaker:retainer, oh, you know, this should carry us through
or at least get us most of the way there. But like you said at
Speaker:the beginning, if this prolongs itself, like, I was
Speaker:separated in 2021 and it just got finalized in
2024. So that's like three years of going through
Speaker:this. And of course the bills just keep adding up. And not to
Speaker:mention attorneys are busy. I don't know about, you know,
wherever you all are listening, but I know here locally,
Speaker:these attorneys like, it takes a lot to get them
Speaker:and to get, you know, information and things like that. And so that's
another piece to why you may need someone else in your corner. Now,
Speaker:you mentioned CDFA. What is a CDFA?
Speaker:Certified divorce financial analyst. And so that is
the designation that I hold. And it's one of
Speaker:the players, if you will, that can
Speaker:be a part of your divorce process to help you
get through it. We work with your attorney,
Speaker:we can work with the divorce coach. Different
Speaker:individuals that you have on your divorce team can work
directly with the CDFA, but their focus
Speaker:primarily is on the financial side. So
Speaker:CDFAs want to make sure that their clients get
a financially fair settlement. And so they're helping
Speaker:to look at the financial decisions that you're making
Speaker:today and thinking about how they will impact you in the
future. So whether it's property division, tax issues,
Speaker:earning capabilities, all of those things, that's the work that a CDFA
Speaker:does. Like, this is my first time hearing about that. And oh my gosh, I
needed you. The best kept
Speaker:secret. Most people don't know about
Speaker:CDFAs. And very often CDFAs work
with higher net worth individuals.
Speaker:And I would say like the everyday woman who
Speaker:is working a career, professional, working a job
and making a good income, but maybe necessarily wouldn't
Speaker:be considered wealthy or rich on paper.
Speaker:We tend not to know about these resources. And so that's part of the
work that I do and just trying to educate and help people understand
Speaker:that it's more, there are more resources available to
Speaker:you than ever before when you are going through a divorce.
And as I said before, have a sincere appreciation for
Speaker:attorneys. They're still out there, they can help you. But even mediators,
Speaker:right, like that wasn't talked about 2030 years
ago as much as it is today. And these. These different
Speaker:individuals can provide so much value and help you keep the cost of your
Speaker:divorce down, which, to me, should be one of the most important
things outside of making sure that you're okay, you walk
Speaker:away as sane as possible and that your kids are okay. Gotcha.
Speaker:Gotcha. Well, this is. You definitely learned me something today,
because I had no idea. Okay, so, number
Speaker:one, we need to get organized. Got that. Number two, having too much
Speaker:reliance on your attorney, y'all, it gets expensive. We have time for
one more thing. What's one worth mistake that we make when getting
Speaker:divorced? Financially. Yeah. So it's not understanding
Speaker:your financial position. And what I mean by that is
your household income will
Speaker:change. Period. Hard stop. Your household
Speaker:income will change. And so the lifestyle or the
budget that you had during your marriage will likely
Speaker:be impacted post divorce. And so there
Speaker:needs to be a lot of awareness and
information gathering that you are doing to understand what your
Speaker:financial position is. And very simply put, as you know,
Speaker:it's really just about understanding your expenses
relative to your income. So what's coming into the door? What's going
Speaker:out of the door? Okay. And also knowing that
Speaker:when your divorce is over, even if you're getting support,
that could be spousal support, that could be child support, that some things may
Speaker:have to change. And so when you're
Speaker:negotiating, that's why, again, we come back to the organization
piece. Knowing your numbers and what makes
Speaker:sense as far as what you're fighting for, what you're willing to
Speaker:settle for and agree to should be tied to math
and not emotions. And that's very difficult
Speaker:because going through a divorce can be so
Speaker:emotional. And when people have the
right support, it makes it a little bit
Speaker:easier. Okay. You're still gonna be. You're still gonna have some good
Speaker:days and some bad days. But if you have the right support, then you can
get through it and manage the emotional side so that when
Speaker:you are making decisions from an informed perspective
Speaker:and you understand, hey, this is how the dollars will fall
when this divorce is final. And I know that I can take care of myself
Speaker:and I can keep a roof over my head, then you
Speaker:feel like you have gotten a much more fair deal
and putting yourself and your family in a better position. That is so
Speaker:true, because it does get very emotional throughout
Speaker:the process. Like, there were many times where I was, like, I just wanted to
break down. And even, you know, you
Speaker:spoke of mediation. Even sitting in mediation was
Speaker:very draining. Luckily, you know, I did kind of follow the
tips that you had other than number two. Didn't know about that.
Speaker:But, you know, being organized and knowing
Speaker:what I wanted out of the situation really helped, but it was still very
draining. So I completely agree with you with the
Speaker:understanding your financial position position. Because, like, in my
Speaker:situation, of course, I was more in the know about the
financials than the other party. And so it,
Speaker:you know, they were kind of using my information to figure
Speaker:things out, if that makes sense. So it's almost like the most
organized person gets the upper hand. Would you
Speaker:say? Oh, absolutely.
Speaker:Kudos to you because you were the more organized person. And like I
said, someone always loses. So I don't want
Speaker:to necessarily say you come out the winner, but you can't come out on top
Speaker:because it really is about having the information
and being able to make those decisions based off of the information.
Speaker:And at the end of the day, if someone's in the dark
Speaker:about their finances or if someone is just not paying close
attention to how the numbers fall,
Speaker:you're probably not going to be in the best position. And no one wants
Speaker:that. Right. We want you, especially in the divorce support
community. We want you to feel like
Speaker:you can walk away and start a new life and take a
Speaker:deep breath and say, okay, I made it through that. It was a heck of
a ride, but I made it through. And to your
Speaker:point, when you are organized and you can pay more attention to
Speaker:the numbers and you know what you're getting yourself into to a certain
extent, when everything is over, then you just feel much, much better about
Speaker:it. Completely agree. When you have your stuff
Speaker:together, then you're ahead of the game. Yes. Yes.
Now, Nikki, this was gems on top of Jim's. On top of
Speaker:Jim's. And I wish I had this episode a few years ago when I
Speaker:started this process, but if people are listening and they're going through
the process or about to go through the process, how could they find more
Speaker:about you or any of the information that you provide? Yeah, that's a great
Speaker:question. Thanks so much for asking that. The best way to connect with me
is through my website. It's
Speaker:www.thefirmaproach.com. i am on
Speaker:social under the firm approach for everything. I'm not great at
social media. I don't love it. I'm just being transparent.
Speaker:So if you want to connect, find me. You can
Speaker:find out more about me and what we do, how we serve people. I
also have a blog, and then I also have a newsletter.
Speaker:And so I send out information just to to help people
Speaker:in the pre divorce and post divorce stage.
Post divorce you say.
Speaker:But that's another episode for another day. Thank you
Speaker:so much, Nikki, for coming on the show. And if you all didn't catch all
of that, I'll be sure to have it in the show notes, so check those
Speaker:out. I appreciate you dropping these gems because like I said, I definitely
Speaker:learned something and I know the audience did too. So thank you so
much. It's been my pleasure. Thank you for having me.
Speaker:Bye. Thank you for listening, joining and
Speaker:being a part of the Money Talk with TIFF podcast this week. You can check
Tiff out every Thursday for a new Money talk podcast, but if you
Speaker:just can't wait until next week, you can listen to previous podcast
Speaker:episodes@moneytalkwitht.com or
follow TIFf on all social media platforms at
Speaker:moneytalkwitht. Until next time, spend wise
Speaker:by spending less than you make a word to the money wise is
always sufficient.