Reader Case Study: Stay Married on Paper or Finalize the Divorce?
Adrianna is a 40-year-old mom to two teenage boys who lives in Richmond, VA. She and her husband recently separated and she’s in the process of figuring out if it’ll make more sense to stay married on paper or finalize their divorce. Along with this question, she’s wondering about beefing up her retirement investments and transitioning to earning a full-time income on her own. She enjoys her part-time, work-from-home position as an administrative assistant, but it doesn’t pay enough to cover her expenses, nor does it include health care or retirement benefits. Let’s dig in to help Adrianna figure out a sustainable path forward as a newly single mom!
What’s a Reader Case Study?
Case Studies address financial and life dilemmas that readers of Frugalwoods send to me requesting advice. Then, we (that’d be me and YOU, dear reader) read through their situation and provide advice, encouragement, insight and feedback in the comments section.
For an example, check out the last case study. Case Studies are updated by participants (at the end of the post) several months after the Case is featured. Visit this page for links to all updated Case Studies.
The Goal Of Reader Case Studies
Reader Case Studies are intended to highlight a diverse range of financial situations, ages, ethnicities, geography, goals, careers, incomes, family composition and more!
The Case Study series began in 2016 and, to date, there’ve been 61 Case Studies. I’ve featured folks with annual incomes ranging from $17,160 to $200k+ and net worths ranging from -$317,596 to $2.9M+.
I’ve featured single, married, partnered, divorced, child-filled and child-free households. I’ve featured gay, straight and trans people. I’ve featured men, women and non-binary folks. I’ve had cat people and dog people. I’ve featured folks from the US, Australia, Canada, England, South Africa, Spain and France.
I’ve featured people with PhDs and people with high school diplomas. I’ve featured people in their early 20’s and people in their late 60’s. I’ve featured folks who live on farms and folks who live in New York City.
The goal is diversity and only YOU can help me achieve that by emailing me your story! If you haven’t seen your circumstances reflected in a Case Study, I encourage you to apply to be a Case Study participant by emailing email@example.com.
Reader Case Study Guidelines
I probably don’t need to say the following because you folks are the kindest, most polite commenters on the internet, but please note that Frugalwoods is a judgement-free zone where we endeavor to help one another, not condemn. There’s no room for rudeness here–the goal is to create a supportive environment where we all acknowledge that we’re human, we’re flawed, but we choose to be here together, workshopping our money and our lives with positive, proactive suggestions and ideas.
A disclaimer that I am not a trained financial professional and I encourage people not to make serious financial decisions based solely on what one person on the internet advises. I encourage everyone to do their own research to determine the best course of action for their finances. I am not a financial advisor and I am not your financial advisor.
With that I’ll let Katie, today’s Case Study subject, take it from here!
Hi Frugalwoods! I’m Adrianna. I’ve reached the delightfully confusing age of 40 while somehow acquiring two kids and a cat. We live in a suburb of Richmond, VA, in a wonderful neighborhood where the boys (aged 12 and 10, even more delightfully confusing!) are walking distance from school. Their dad and I separated verbally in September 2019, financially in August 2020 (mostly), and finally using legal paperwork in January 2021. He was able to find a house in the same neighborhood so the kids are able to go back and forth with ease, and the relationship all around is cordial.
Hobbies and Family Fun
We’re a pretty boring bunch, actually…we’re all into video games so we stay home a lot, but we do like going to the pool in the summer. Historically we do a beach trip every summer, but obviously didn’t do one in 2020 and I’m not sure if that tradition gets to evolve with the new family format or not. The boys are on the swim team at the neighborhood pool, and I plan ahead for several weeks of camp in the summer, but so far their extracurriculars budget has been pretty low. Pete is showing some interest in soccer and starting middle school next year might open up new options for Alex as well, so I should probably be prepared!
I myself have quite a few more interests, but those have been harder to navigate lately. At home I like video games, gardening, and occasionally puttering around with crafty stuff (watercolor painting being the latest trend). When life returns to some semblance of normalcy I hope to get back into my team sports.
My boys are disgustingly healthy and don’t even have seasonal allergies. Still not sure how they won that lottery! They did, however, lose the straight teeth contest. So two rounds of braces are in the near/intermediate future. Pete also has glasses, and they both take medication for ADHD. As for myself, I have a host of small annoying health conditions, but the only major-ish ones are some recurring musculoskeletal problems. Not only might that keep me from being able to get back into my more physical hobbies, I need to plan for the possibility of a surgery or two down the road (in addition to current therapies aimed at preventing surgery!).
I grew up in a frugal household and remember my mom clipping coupons, comparing prices at the grocery store and packing our own lunches to take to major league baseball games so we didn’t have to buy stadium food. All my clothes were hand-me-downs and most of my stuff came from yard sales… but I don’t remember minding all that much (except the stadium food. I reallllly wanted stadium food!). My parents would match my savings for big purchases like my class ring, letter jacket, my instrument in high school, etc, which encouraged me to be a saver.
Then I married a man who was not a saver, had a “buy bigger” philosophy, and came from a family that didn’t provide much financial literacy. So we ended up with a lot of pendulum swings between spending and penny-pinching. Example: we’d be doing pretty well with money for awhile, and then he’d suggest we do some fun things. We’d spend more on the fun things than I was comfortable with and I would pull back on all spending (probably excessively, to be honest) for awhile to compensate. He’d cooperate for awhile then start to get antsy about being so restricted, so we’d spend some money on fun things, and the whole cycle would repeat.
This was complicated by the fact that I didn’t have a head for budgeting. I could MAKE a budget, but I didn’t truly UNDERSTAND budgeting. I kept being blindsided by bills that I really should have seen coming, and I didn’t know how to plan ahead budget-wise. Looking at the bank account balance can be so deceiving! So even though the family income was enough that we should have been able to put something away, between our spending cycles and my money (mis?) management we were actually slowly eating away at our savings.
We used Quicken for awhile, then Mint, but it wasn’t until I discovered YNAB in 2018 that things started taking a turn for the better. Somehow the envelope system and the “give every dollar a job” worked with my brain in a way that the other programs didn’t. Now, three years into using that system, I know where every penny of my spending goes, what every penny of my savings is intended for, and my net worth is finally headed in the right direction!
My job is a super-flexible, work-from-home-in-pajamas Administrative Assistant gig. Everything is over the internet and I don’t even have to talk to people on the phone! It’s a great part-time job that I started in 2017 to: a) be less bored while the kids were in school and b) give ourselves a little more money for fun stuff. My employer has been great about giving me more hours and pay increases over time, and I’m hearing rumors that even more hours are going to be available in the coming months, so I feel good about remaining in this job for at least the short term.
The major downside to this job is that there are zero benefits. In fact, until last September, I was a contract worker, not an employee. So there’s no retirement plan, no health insurance, no paid time off. That didn’t matter until my spouse and I separated. Now, it’s a bit more of a concern. I’ve toyed with the idea of starting my own proof-reading service, even going so far as to create a website etc, but the pandemic hit right as I was getting started and the kids being home all the time put that idea on the back burner.
Lately I’ve been contemplating whether to get back to it in the fall once both kids are back AT school full-time. So depending on how well that goes, it could either be an additional revenue stream or a full-time income. My biggest concern is whether I have the self-confidence to actually see it through.
What feels most pressing right now? What brings you to submit a Case Study?
Obviously I’m in a transition period right now, from being a SAHM with a side hustle to having to think about getting more hours/pay, retirement, and all the things that I took for granted during married life. I haven’t even filed taxes in over 15 years! So making good decisions now, when it’s easiest to make a change because everything is changing, is very important to me.
The biggest question I have right now is whether to file for divorce or stay married on paper.
1) Married on paper gives me health/dental insurance that I don’t have to pay extra for, and access to a Flexible Spending Account for some medical expenses (although I have to give priority to kids’ needs, since it is shared among all four of us). I have to pay more in income taxes if married filing jointly than if I filed as single (I’m not sure how it works if we tried married filing separately, but there are downsides to that too I think).
2) Divorced gets me a better tax situation, the peace of not having financial ties to him anymore, but the burden of finding healthcare. This sounds like a no-brainer, but the limbo I’m in is unpleasant. I’m a rip the band-aid off kind of person, but if it truly is the best financial thing to stay married on paper, I will suck it up. In Virginia I have to wait 1 year from separation to file for divorce, so I can’t file until January 2022 regardless.
The other big thing is the fact that I have almost NO retirement savings.
My spouse had two accounts that were roughly equal at the time we separated, so he’ll be signing the inactive one over to me once divorce is filed, but beyond that I only have a Roth IRA I opened in April. So it’s still teeny tiny. I don’t know what options are available beyond the Roth, and frankly even opening that was nerve-wracking because I wasn’t 100% sure that I understood what I was doing.
I mean, why can I not contribute to a Roth IRA if I’m married filing separately, but I can if I’m married filing jointly? So weird. I’ve gotten some advice about getting my spouse to do a Rollover IRA with his inactive account before we file for divorce, because apparently it’s easier to transfer without an expensive and time-consuming QDRO, but I haven’t been able to find corroborating info online and it’s not something my lawyer is familiar with.
Frankly, everything retirement has me overwhelmed. I’ve read some good books and blogs about investing in general, and I think I understand that decently well, but somehow I’m struggling with how it all works in IRAs etc (possibly because I have no direct experience, never having had one before).
What’s the best part of your current lifestyle/routine?
I really like being a part-time worker so I can be available for my kids after school and take trips with them without having to worry about work scheduling. And I absolutely LOVE where I live. I definitely don’t see myself living here after the boys move out (waaaay too much house for one person) but for now this is perfect. My finances feel under control, even if I don’t have long-term plans in place yet, because of YNAB. While I try not to spend more on things than I have to, I also don’t feel like I have to say no every time the boys want to get ice cream or order pizza, and that’s important to me.
What’s the worst part of your current lifestyle/routine?
Relying on my spouse for 90% of my income is not awesome. I need to get myself to a place where I can support myself once the child support portion goes away (in about 8 years). I’m sure lots of people will tell me to sell the house so I have more savings and (possibly) a smaller rent/mortgage payment, but if I did then the support payment would be reduced as well so it wouldn’t really be any different in the end.
It’s a similar situation with my work income, once I hit a certain threshold of income he’s going to start decreasing the support payments. And before anyone shouts that that’s unreasonable, he’s currently giving me more than half of his income so that we can stay in this house. I don’t know the threshold because that’s part of the final divorce decree that we haven’t hashed out yet, but I wouldn’t allow it to be less than $40,000 a year.
And not knowing whether I’ll have any retirement is pretty stressful.
Where Adrianna Wants to be in Ten Years:
- No debt: Ideally in 10 years I will have sold this house and bought a smaller place, preferably somewhere with more land for gardening and no HOA dues. And maybe chickens.
- College: My kids have 529s from their grandmother, but I would like to be able to help them a little too. The 529s probably won’t be enough at a 4 year college (though they might be sufficient for trade school), and I honestly don’t know what their dad is planning to do in this regard.
- Retirement: if I am on track to retire at 60 that would be great. Earlier is even better.
- I like food, I like playing sports and being active, I like going places. As long as I can keep doing those things, I’m happy!
- My only non-nebulous goals are visits to other continents at some point in life.
- I work to live, not live to work! If I’m still working the same job I have now, that will be fine with me because it’s flexible and interesting enough without sucking the joy out of life.
- Even better if the proof-reading gig takes off, because that’s FUN! 🙂
|Support from ex||$4,550||$2,100 every other week. This is mostly child support, as I pay for just about everything (camps, school expenses, extracurriculars, etc).|
|Adrianna’s income||$900||Net after federal and state taxes. My hours fluctuate so this is an average.|
|Dividends||$7||From Navy Federal CU accounts|
|Item||Outstanding loan balance||Interest Rate||Loan Period and Terms||Equity||Purchase price and year|
|Mortgage on house||$381,301||2.63%||30-year fixed-rate mortgage||$1,400||$382k; refi into my name in March 2021|
|Item||Amount||Notes||Interest/type of securities held||Name of bank/brokerage|
|Navy Federal Accounts||$32,500||This is pretty much all of my money. I keep it all in savings until the end of the month when 90% of my bills are due and then I move enough to checking.||0.25% interest||Navy Federal|
|Employer-sponsored retirement account belonging to ex-spouse||$12,000||This amount will be mine when divorce is final, but as far as I know, he can’t give it to me until then without penalties. No contributions have been made to it in at least five years, probably more like ten, because it was from a prior job.||I can’t find the paperwork, but I’ll keep looking!||Fidelity|
|Roth IRA||$8,000||I just opened this in April, maxed out the contributions for 2020 and set up transfers to max out 2021. Because of start up amounts it’s pretty evenly split between bonds and stocks at the moment, but each new addition is these percentages.||VTSAX (75%) & VBTLX (25%)||Vanguard|
|Trust account with Divorce Lawyer||$3,300||This is sitting there until the divorce is final. Lawyer doesn’t think we’ll use it all since things have been civil so far.||?||Lawyer|
|Vehicle make, model, year||Valued at||Mileage||Paid off?|
|Mazda Mazda5 2015||$11,000||66,000||Yes|
Credit Card Strategy
|Card Name||Rewards Type?||Bank/card company|
|Citi 2% Cash Back Card||2% back on all purchases||Citi|
|Amazon Store Card||5% back on Amazon purchases||Synchrony|
|Mortgage||$1,980||Refi’d in March and lowered my previous payment by $200, even with buying out the spouse’s portion!|
|Groceries||$600||Budgeted amount. It’s been weird trying to figure out what a good amount is since we haven’t had very long as just the three of us, but we came in under budget from regular spending the last couple months and I used what was left to stock up the pantry/freezer. With two tweens I expect the hollow leg syndrome to kick in soon!|
|Car Insurance||$118||With Nationwide. I need to call and see if they can do better, or maybe switch. But they do my home insurance too.|
|Gym||$99||I can’t get out of the contract but it ends Sept. ’22.|
|HOA dues||$87||Actually extremely reasonable for our area!|
|Internet||$81||I work from home so this is non-negotiable. There’s only one provider that services our neighborhood.|
|Auto Care||$80||Two oil changes and a state inspection every year, plus license renewal and car registration costs.|
|Water||$75||Includes summertime lawn irrigation and garden watering, with rain sensors to keep from watering when not needed. We also take most of our summer showers at the pool so it kinda balances out?|
|Christmas non-food||$67||Presents, yearly family photo (taken by my friend, so the shoot itself is free), cards for family, and one new string of lights a year.|
|Life Insurance on spouse||$52||Non-negotiable because if he dies we’re in deep doo-doo without it.|
|Family Adventures||$50||Budgeted amount. This hasn’t gotten much use in the pandemic but it’s where we’ll get money for amusement park tickets, day trips to the beach, etc. Also known as the “make sure my penny-pinching doesn’t mean no fun” fund.|
|Family Dining Out||$50||Average. The three of us eat out about twice a month and the rest of the time we cook.|
|Boys Allowance||$50||Budgeted amount. They get their grade level x2 per month right now. I also put extra in here for if they do bonus chores for pay.|
|Vacation||$50||Budgeted amount, but also pretty much what I’ve been spending every month during the pandemic to give myself little mini-breaks.|
|Summer Camps||$50||I try to budget enough for each kid to have 2-3 weeks of camp every summer.|
|Medical||$50||Currently most expenses are able to be paid for on the FSA but I know that won’t work for everything, so this is slowly building.|
|Natural Gas||$40||Heat & water heater|
|Gasoline||$40||This is the average of the last 5 months, but I was making a lot of trips to my mom’s house so this will probably go down.|
|Lawn Care||$40||I will probably cancel this after this year. We signed up three years ago because the yard was unpleasant to be in. It’s pretty much recovered now and I think I can keep it that way without help.|
|Mom Dining Out||$40||I get solo lunch/dinner 3-4 times a month.|
|Pet Expenses||$30||Budgeted amount. Cat food and litter.|
|Boys Shopping||$30||Budgeted amount. This has almost exclusively been for shoes and Halloween costume supplies, so far. I almost never have to buy clothes for them because grandmothers.|
|Mom Fun Money||$30||Anything I buy for just me that isn’t clothes or food. Includes haircuts, pedicures (maybe twice a year, I can paint my nails anytime but the foot scrub etc is delightful), books, new video games for me, etc.|
|Mom Clothes||$30||Budgeted amount. Because of health and weird sizing, I have to purchase special bras and shoes, both of which I can only get new. On the rare occasions that I need something else I generally hit up thrift stores. This is pretty much enough for me to buy two pairs of shoes and two new bras a year.|
|Home Maintenance||$30||Budgeted amount. This is intended for things that are “attached” to the house, like lightbulbs, new flapper for the toilet, wall patch stuff, etc.|
|Birthday parties||$30||Birthday parties for the kids are pretty much just cookouts for family, so this is just food costs.|
|Household tangibles||$25||Budgeted amount. Things for the house that don’t get used up, like dishes, new vacuum, etc. Thrifted where possible!|
|Subscriptions||$24||Includes: Lightroom/Photoshop subscription, Nintendo online, YNAB, and half of Amazon Prime (I split with my mom). These are not negotiable, although if my mom wasn’t helping with Prime I would probably drop it.|
|School Expenses||$20||Budgeted amount. They didn’t need much during school-from-home, but they’re going back in the fall so I’m saving up. I will sometimes use this category for parenting workshops as well.|
|Car Taxes||$17||Personal property tax|
|Alex Activities||$15||This is how much I’ve been putting in during the pandemic. It might not be enough for post-pandemic!|
|Pete Activities||$15||This is how much I’ve been putting in during the pandemic. It might not be enough for post-pandemic!|
|Holiday parties||$15||My brother and I take turns hosting Thanksgiving/Christmas for our two families and our mom.|
|Gifts||$10||This is for two biological nephews and four best-friends’-kids’ birthdays.|
Adrianna’s Questions for You:
- Does it make more financial sense to stay married on paper? Or finalize the divorce?
- What’s the best way to ramp up my retirement savings (or investing in general, I guess) under each scenario?
- Should I set anything aside for the kids’ post-secondary schooling?
- Should I keep my cash easily accessible?
- What do I do about that retirement account?
Liz Frugalwoods’ Recommendations
I want to start off by congratulating Adrianna on finding a system of budgeting and financial management that works for her! It’s difficult to cycle through different approaches to budgeting and I commend her for sticking with it until she found a viable long-term solution. Well done! Let’s hop right to her questions:
Adrianna’s Question #1: Does it make more financial sense to stay married on paper? Or finalize the divorce?
Short answer: finalize the divorce.
I commend Adrianna for charting this new life as a single mom. It takes a lot of courage to leave a marriage–or a job or a friendship or a city or a house or anything–that’s no longer serving you and providing fulfillment. I want to highlight and recognize how hard that is to do and that Adrianna is rocking it and doing it with intention.
Aside from the emotional and psychological balm of finalizing the divorce, I also think it makes good financial and tax sense. While I’ve never gone through a divorce, and I don’t live in Virginia, I’ll try to paint in broad strokes here.
I think it’s risky to stay married on paper because, while the separation has been civil thus far, this money is not actually Adrianna’s until the divorce is finalized. It’s risky to rely on someone else for financial security without a legal framework. The divorce will provide this framework and make it impossible/more difficult for her ex to manipulate the money or wheedle out of paying child support.
Additionally, finalizing the divorce should reduce Adrianna’s taxes.
Child Support v. Mom’s Income
A major question I have is on Adrianna’s note that increasing her income will decrease her ex’s child support payments. In many cases, child support does not correlate to the mom’s income. Further, if it does, it should be a gradual decrease, not a cliff. If it is a cliff–or a steep decrease in payments–that’s a point Adrianna’s lawyer should negotiate.
I encourage Adrianna to talk with her lawyer about this and ask them to clearly explain the rules governing child support v. mom’s income. Is it possible Adrianna is thinking of alimony in relation to her income? Either way, I don’t know the answer, but I also don’t think this is quite right. Bottom line: a good question for the lawyer!
Additionally, is alimony included in the child support payment? Or is that a separate point that should be negotiated? Another question for her lawyer.
Divorce laws are state-based, so I strongly encourage Adrianna to find local support groups of other divorced parents who can help her understand the process in Virginia and the things they wished they’d known before the divorce. I imagine there are online forums, Facebook groups, etc that can shed a lot of light on this!
What About Health Insurance?
Since Adrianna’s income is so low, she should qualify for a heavily subsidized healthcare plan through the ACA (Affordable Care Act). She should check out Virginia’s ACA options and calculate what she’ll pay each month.
Adrianna’s Question #2: What’s the best way to ramp up my retirement savings (or investing in general, I guess) under each scenario?
My answers from here on out are all the same: earn more money.
I love that Adrianna’s part-time gig has served her so well during this time of incredible tumult and I congratulate her for making it work during a divorce, unexpected homeschooling and a global pandemic! Once her kiddos are back in school in the fall, I think it’ll be time for her to find a full-time job.
If her current employer can ramp her up to full-time, that’d be awesome. If she can ramp up the proof-reading side hustle to provide income, that’d be awesome. Or, she may need to scrap both of those part-time gigs in favor of a full-time position with benefits. There are endless options here, but the end result needs to be more money coming in every month. I personally am a HUGE fan of working full-time WHILE building up a side hustle. If Adrianna can secure more hours and ramp up the proof-reading on the side, the proof-reading may eventually be able to supplant the full-time job. But for the moment, she’s in too precarious a financial position to work only part-time.
Adrianna’s Question #3: Should I set anything aside for the kids’ post-secondary schooling?
Nope, not at this time. This is a “put your own oxygen mask on first” scenario. Adrianna needs to secure her own retirement BEFORE considering any financial assistance for her kids. The kids can get student loans for college; Adrianna cannot get loans for retirement. Think of it this way: Adrianna’s kids would probably prefer to take out student loans than have their mom move in with them because she can’t afford her rent.
Adrianna’s Question #4: Should I keep my cash easily accessible?
Yes indeed! Adrianna has done a FABULOUS job of building up a $32,500 savings account and she should absolutely keep that money liquid for the time being. At her current rate of spending–$4,138 per month–her emergency fund alone should be in the neighborhood of $12,414 (three months worth of her spending) to $24,828 (six months worth of her spending).
While Adrianna has $7,627 more than that in her savings account, she’s also in a period of upheaval. Anytime upheaval is happening in your life–be it a divorce, a move, the birth of a child, etc–you want to have extra cash on hand. You never know what you might need it for and it’s a lot easier to have it than not have it.
Adrianna’s Question #5: What do I do about that retirement account?
Short answer: put more into it :)! This goes back to earning more and I love that Adrianna opened an account and is thinking strategically and proactively about her retirement. She mentioned she’s a tad confused on the different types of retirement accounts available to her, so let’s do a quick rundown:
Roth IRA (Individual Retirement Account):
- A Roth IRA is a retirement account that’s post taxes.
- This means you pay taxes on the money you put into a Roth IRA, but you don’t pay taxes when you withdraw the money in retirement.
- A Roth IRA grows tax free.
- You need to be age 59.5 before you can withdraw money penalty-free (although there are exceptions).
- Your eligibility to contribute to a Roth IRA depends on your income and your particular tax situation.
- I like this Nerd Wallet article on Roth IRAs if you want to read more.
Traditional IRA (Individual Retirement Account):
- A traditional IRA is a retirement account that’s pre-tax.
- This means you don’t pay taxes on money you put into an IRA, but you do pay taxes when you withdraw the money in retirement.
- There are no income limits. Anyone can contribute to a traditional IRA.
- You need to be age 59.5 before you can withdraw money penalty-free (although there are exceptions).
- More about traditional IRAs here.
I congratulate Adrianna for opening her Roth IRA with a brokerage (Vanguard) offering low-fee total market index fund investing options. Way to go!!!! She mentioned her asset allocation between stocks and bonds, which sounds great. If you want to read more about asset allocation, check out this case study, where I did a deep dive.
In terms of how much Adrianna should have in her retirement investments, let’s refer to Fidelity’s simple retirement rule of thumb:
Aim to save at least 1x your salary by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67.
This is complicated a bit by the fact that Adrianna can’t actually live on her salary alone. So let’s take her total annual income, which includes child support, and multiply that by three since she’s 40. That’s $65,484 x 3 = $196,452. Adrianna has $8,000 in her Roth IRA and stands to receive $12k in retirement from her ex once the divorce is finalized. That’ll give her a total of $20k, which is a great start! Like I said, the name of the game for Adrianna is to increase her income. In terms of “what to do” with her Roth IRA? Let it grow, add to it and leave it invested.
While I think there are some areas Adrianna could save on, the primary focus for her should be increasing her income.
A few options for reducing her spending:
- Gym at $99: once the contract ends, that’s a cool $1,188 per year.
- Christmas at $67 seems high? That’s $804 per year.
- Family Adventures, Dining Out, Allowances, Vacations all at $50 each ($200 monthly/$2,400 yearly): Wondering if there are efficiencies to be had here?
- Lawn care at $40: can the kids mow the lawn?
But I’ll reiterate that this trimming around the edges isn’t going to get Adrianna to a fully funded retirement. She’s got to increase her income.
- Move forward with finalizing the divorce. Ensure that her lawyer is working fiercely on her behalf. I think the most important thing for Adrianna to do in the next year is to finalize the divorce in the most advantageous way possible for her future. That’s going to be an enormous part of her assets over the next few years so it’s important to get it right.
- Ask her lawyer about child support, alimony and the relationship to her income level.
- Investigate and sign-up for the ACA (assuming she doesn’t get a full-time job with benefits).
- Increase income by either/and:
- Securing more hours with her current job
- Adding proof-reading clients
- Finding a new full-time job
- Augment her retirement investments in order to catch up with where she needs to be.
- Continue her awesome–and effective–use of YNAB (You Need A Budget) to stay on track with her spending and saving every month.
Ok Frugalwoods nation, what advice would you give to Adrianna? We’ll both reply to comments, so please feel free to ask any clarifying questions!
Would you like your own case study to appear here on Frugalwoods? Email me (firstname.lastname@example.org) your brief story and we’ll talk.
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