Divorced Husband Broke Financially

I would like to share with my readers a story of divorced couples. Yesterday I had a sudden encounter with the lady name Jenifer who is divorced for 15 years. Jenifer had amicable break up with her husband Mike. Mike was the principle support provider for Jenifer, and thus she was grateful and lucky.


Mike is the high-priced advertising executive, who was pulling down over $600,000 a year. Somehow he and his firm continued making big bucks in 2008 and 2009 despite economy downturns. But reality finally caught up with them recently in late 2009, when company decided to cut down Mike's salary by 50 % and then another by 50% making it $150,000. Thus it become difficult for Mike to provide support payment to Jenifer and gradually and finally the condition got more worse.




Thus few days back Mike called up Jenifer asking her to sign off on the documents so that he could take loan against his 401(K) to pay taxes and credit card bills.


I am sharing this story with you because I have empathy for this couple. Even though they make a lot of money than most of us, but still they are facing problems. Both Jenifer and Mike made lot many mistake for many years. Of course that doesn't matter now because it won't help them or anybody else.


Thus I would like all the couples to wake up and not to worse their situation like Jenifer and Marry. Following are the few simple step which I would like to recommend.



1. Track all your little expenses

Keeping eye on your expenses is first and foremost step. It is necessary for you to know what it cost to your life. If you are focusing on drastic cuts it is necessary for you to write down every expense made by you. Doting down on paper will enable you to figure out the area where you need to curtail your expense.



2. Jenifer should also earn her livelihood

If Mike's company is making this kinds of cut there is great possibilities that after some point of time the company might be on the ropes. In that case Mike will also on street. At that point of time Mike won't able to give any support to Jenifer. Well in that situation what will Jenifer be doing then? Thus if Jenifer could also earn her livelihood, then such type of situation would not have cropped up.



3. Don't sign off on Mike's request to take loan against the 401(K)

If Mike is unable to pay cash to IRS and credit card company that means he is still leaving ways out of means.This also mean that Mike is not at all a good financial planner. If such deal is carried on , this mean that half of 401(K) belong to Jenifer and Mike has to bear 100% of those IRS and credit card bills.



What you think about my above suggestion? Did I missed anything or any other suggestion you would like to give Jenifer? Please post your comments about what you do if you were in Jenifer's place.