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 LIFESTYLE CHANGE |
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Will I have enough to support my current lifestyle?
Will I be able to keep the assets from our division of marital assets
without having to deplete them to pay living expenses?
Will I be able to contribute to savings and
retirement funds?
If any of the answers is "no," you'll have to look seriously at your
budget and adjust your standard of living. It has been proven that most
of us can easily live on at least 10% less than we currently do.
Two friends
At one of our workshops, we met Sally and Jean. They had been best friends
since growing up in a small midwestern town. Both their fathers worked
at a local factory, and there never seemed to be enough money to go
around in either family. In college, Sally met and married Don, whose
career skyrocketed. She became active within her community, chairing
fund-raisers for charitable events and participating in several clubs.
They moved to a mansion complete with two maids, and later, two children.
Ah, the ideal life!
Jean, on the other hand, married Stan, who also worked at the factory
where her father worked. Like Sally, Jean had two children. She became
skilled at sewing their clothes and making good, budget-conscious meals.
As time went by, both couples decided to divorce. Sally was used to
living on an allowance of $138,000 per year, while Jean could do well
on $21,000 per year. Sally's husband Don argued that her best friend,
Jean, could live on $21,000 per year -- why couldn't she?
Sally didn't see how she could possibly cut her budget to less than
$92,000 per year. When Sally's divorce was final, Don agreed to pay
her alimony of $60,000 per year for six years, the $850,000 house, and
$262,000 (half of his retirement account).
After the divorce was final, Sally continued to spend $92,000 per year.
She retained her membership in the country club and continued as the
chair of their annual fund drive. She felt it was important to keep
up her image of a successful, dynamic woman doing volunteer work within
the community. She knew that there was a shortfall between the alimony
she received and the actual amount she spent each year. She also knew
that she could tap into the retirement account to cover any shortages,
and she did.
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