Christian Living


Dave Says: Divorced With No Debt

Dave Says
Author Biography

Dear Dave,

I went through a divorce that was finalized in September, and I have two kids, 12 and 17. I’m debt-free and own my own home, which is worth about $350,000. I also have $160,000 in savings and I receive $1,200 in child support every month. Friends tell me I should start investing, and they’re all telling me something different to do with my money. What do you suggest?


Dear Mary,

Unlike most ladies who go through a divorce, you’re in an excellent financial position. Your net worth is a half-million dollars and you have no debt, so in a financial sense, life’s not too bad.

The first thing I’d say is that you shouldn’t make any life-changing decisions right now. This divorce is still fresh, and you should never make big, long-range decisions when your emotions are out of whack. As for the $160,000, I wouldn’t do a lot with it right now. I’d put $100,000 of it in a CD for a year until you get over the shock and change of what’s happened. You won’t make much money off of it, but you’re not going to lose anything.

Then I’d take the remaining $60,000 and park it in good growth stock mutual funds – ones that are very conservative and have long track records. A year from now, your mind will be in a better place and you’ll be in shape to make real plans for the future.

Also, you’re going to be an empty-nester in a few years. You’ve got to decide what you want to do with the rest of your life. Do you want to back to school, start a business or maybe even be a lady of leisure? You’ve got a little learning to do about investing, too, and giving yourself this year will allow for education and thinking about what you want out of life. It’s probably a little scary for you to think about investing right now, but knowledge has a way of erasing fear and you’ve got a responsibility to your kids to invest this money wisely.

Here are the rules, Mary. Take your time, don’t invest money in something you don’t understand and don’t invest money in real estate or mutual funds unless you’re going to leave it there for at least five years. Make sure you spend time loving on your kids, too. That’ll help with the healing process as much as anything.

- Dave

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