WTOP Interview: Deciding where to live during and after a divorce

Interview Transcript:

Shawn Anderson: 05:11 here on WTOP, another wild trading day on Wall Street [but] this time the DOW closed up 567 points that’s a nearly 2.5% increase and the Nasdaq and S&P both 2% today.

Hillary Howard: Joining us live Dawn Doebler, co-founder of Her Wealth and Senior Wealth Advisor at The Colony Group in Bethesda. Great to see you Dawn.

Dawn Doebler: Good to see you.

Hillary: So people have been watching the market you know, a little nervously, what’s the backstory here?

Dawn: Well I think you know, many times uncertainty can lead to volatility and that’s really what’s going on here, there’s a lot of uncertainty in the political environment, in inflation and valuations are relatively high. That’s certainly can breed fear about what’s coming next and that can tend to feed on itself. So people are inclined to react and then sometimes that causes many people to react, which generally is not something that we recommend and fortunately we saw a nice turnaround today so that’s a good sign

Shawn: Alright now let’s talk about what we wanted to talk to you about today, unfortunately it’s about divorce and if you’re getting divorced and you’re deciding where to live and whether you should sell your house, these are among the most difficult decisions you can make and it can be fraught with emotional, practical, significant financial implications here, what makes this such a difficult decision for folks going through a divorce?

Dawn: Well you know it can be an emotional decision just like looking at the stock market going up and down and wondering about your retirement and the point that we wanted to make here is that actually you can lose as much from making a poor decision about living situation and divorce as you can from a 1000 point drop in the stock market. So it is an emotional time for many people, so we really suggest that people do what they can to try to cut through to the emotions, not necessarily take recommendations from their friends because every situation is very unique. So we wrote our article to come up with some things for you to think about as well as 6 questions to ask yourself if you think you’ve landed on a decision.

Hillary: Well what are some of those questions?

Dawn: Well Hillary we’ve outlined 3 basic choices:

1.    Certainly staying in your home and there can be merits to that, especially keeping one aspect of your life certain particularly if you have children but what we want people to be considering is long term maintenance cost and really, what are the total costs of keeping your home and can you really afford that and if someone’s going to need a mortgage to do that, you have to consider? Do you have the cash flow and do you have the credit rating to qualify for a mortgage, that’s something that people often ignore.

2.    A lot of people may consider buying a new home, that’s an attractive option at this stage of life certainly and under the right circumstances it may give you an option to begin building equity. But, on the flip side, there are a lot of upfront costs and what we see happening is, those costs require cash and often times cash is tight because the joint accounts are frozen, maybe settlement takes longer than expected and also if you’re making that decision in haste you may change your mind.

3.    So it’s not necessarily the best option and that’s really why I often recommend that people consider renting, it gives you an opportunity to try out your new lifestyle, see how things go and actually free up some cash flow from other things that you may want to do, like starting a new retirement account or starting a business.

Shawn: Final 30 seconds, how do you know if you’re making the best decision?

Dawn: Well once you reach what you think is a decision we have 6 questions. I’m going to give you just my two favorite, the first one is – ask yourself how does the choice meet your needs of yourself and your family now and in the next 5 years and the most important, if you make that choice, what are you giving up with your other financial goals.

Hillary: Alrighty, thank you Dawn. That’s Dawn Doebler with the Colony Group, for more go to wtop.com and search Her Wealth.