MY FAVORITE DIVORCE QUOTE, if one can have such a thing, comes from comedian Louis C.K.: “No good marriage has ever ended in divorce. If your friend got divorced, it means things were bad. And now, they’re better.”
For myself, these words certainly ring true. But “better” comes at a price: Being a divorced, middle-aged woman means looking at financial matters from a different perspective than my married friends. Since I no longer have a spouse, financial security rests squarely on my shoulders. I don’t have the luxury of knowing there’s a second income, in the event of a job loss or other financial emergency. Because of this, I made establishing an emergency fund a priority. I used the proceeds from the sale of my house to set up an account with enough money to cover at least nine months’ worth of living expenses.
My insurance needs also differ from the typical two-income household. Having both a short- and long-term disability plan is critical. I have access to long-term disability insurance through my job. It would provide 60% of my monthly income, in the event I wasn’t able to work for a period of more than 180 days. Since I typically set aside approximately 25% of my gross wages each month for retirement savings and would cut that back if I were disabled, I feel confident I could live off the proceeds from this single policy. For shorter-term illnesses, I maintain a balance of ten weeks of paid sick-leave. I could also use my accumulated vacation days to cover a medical emergency, if necessary.
Because I don’t have any dependents—my corgi Zoey doesn’t count in the eyes of the IRS—there’s no reason to carry a life insurance policy. But having no children or a spouse also means I have fewer options when it comes to long-term care. I recently learned I’m eligible to purchase a long-term-care policy through my state’s public employee retirement system. This unexpected benefit is available to me because my first job out of college was at a state educational institute. By purchasing a policy as a member of a larger pool of participants, I’d pay less than if I purchased a policy individually.
So is Louis C.K. right? Yes, for me, life after divorce is better—much better. But it took a coherent financial plan to recover my sense of financial security.
Kristine Hayes is a departmental manager at a small, liberal arts college in Portland, Ore. She enjoys competitive pistol shooting and hanging out with Zoey, her corgi. Her previous blogs include Say It Forward and Wanting for Something.