How To Get Divorced On A Budget


Welcome to another episode of the exEXPERTS Divorce etc… podcast where we give you all kinds of information and tips on everything divorce. Why? We’ve lived it, so we get it! We’re T.H. & Jessica. 

T.H.: Welcome everybody to today’s Divorce etc… podcast. I found Michelle Smith on LinkedIn. We do vet our exEXPERTS, just so you know, but our connection was immediate. I couldn’t wait to talk on the phone and share our stories of success, empowerment, and passion for what we’re working on. Michelle is a CDFA pioneer, and she has created this amazing brand. Just the name alone is going to excite you, Wife2CFO. I mean, who doesn’t want to be the CFO of their own life, and maybe advise others on theirs. But start with your own first. Welcome to our show today, Michelle.

Michelle: It’s so awesome to be here, both of you. Thank you.

Jessica: We’re so happy to have you. T.H. has been raving about you since the conversation that you guys had preliminarily. We are just huge advocates, as you know, of women being empowered to be able to understand and take control of their own finances. What more important time to do that than when going through a divorce? So thank you so much for taking the time.

Michelle: Absolutely.

T.H.: Divorce definitely pushes you. Whether you’ve been involved in your financial situation in your marriage or not, you’re going to get involved. You’re going to have to take charge and responsibility for where your money’s going and where it’s coming from, by the way, and face the hard truth and hard facts so that it works for you and your children or whatever kind of future you’re planning for yourself. Michelle’s tagline is ‘Life control through financial control’. Everybody think about that for a second. Now Michelle’s going to explain to you why control’s so important.

Jessica: Life control through financial control, it’s so good.

Michelle: It’s so right, right? I’ve got one name for you to prove this. Ready?

T.H.: Ready.

Michelle: Marie Kondo. If Marie Kondo can change your life through a book called ‘The Life-Changing Magic of Tidying Up’, do you really think that’s not going to happen with your money if it’s happening with your closet?

Jessica: To your underwear drawer! [Laughs]

Michelle: Seriously?

T.H.: Totally.

Michelle: No, but think about that for a second. And that’s no joke, right? What, she’s 38 years old, right? This concept that she was like, where we feel out of control, I always say what we resist persists.

What makes us nervous we actually need to pay attention to. But her whole premise is that when you put your house in order–right, she’s got a system. I’ve got a system. When you put your house in order, you have no choice but then to listen to your inner voice. All the other stuff goes away. It’s not busy.

Jessica: You’re clearing the clutter.

Michelle: You’re literally clearing the clutter, right? And so what you choose to own of your clutter then becomes your choice of how you want to live your life and what you want around you. The same thing with money. Money is not this separate piece of us that’s like this big blob of intimidation and jargon and yeah, that’s all there, whatever, like whatever. Clean the financial closet. Just clean it. When you do it, right, my way is the [xxxx] but when you do it [xxxx] you are literally setting the stage for transformation in you that you don’t even know yet until you do it. You don’t even know. The first and this is the best example of it, an immediate thing you can do without even knowing anything about money…ready? Stop apologizing for asking a stupid question.

Jessica: With regards to money?

T.H.: You and I definitely spoke about that a lot. Because it shows you’re already setting it up that you’re not qualified and you’re not smart.

Michelle: Well, you’re also apologizing as if something you don’t know, because you’ve never done it, you should know.

Jessica: Right, why would you know that if you haven’t done it before?

Michelle: And so why are we ashamed to raise our hand and say, ‘I don’t understand’?

The first thing I teach in my course in my work is to replace ‘I have a stupid question’ with– and, oh, and the way we say ‘I have a stupid question’ is the little girl voice. That little girl’s voice does not belong at the financial table. So it’s not, ‘Oh, I know I should know this. I have such a stupid question. I know this is dumb. I know you’ve probably–’ No. We put our feet on the ground and we replace that question with, ‘I have a clarification question’. Your entire power shifts in you. And then when you get the answer, if you still don’t understand it, that’s not you. That’s it wasn’t explained right. So you ask again, ‘Could you explain that differently? I still don’t understand.’

Jessica: I just want to say part of what I love, love, love that you’re doing, and I’m sure you hear this more than even we do, which is that the scariest thing for women, or I would say amongst the top three, is what’s going to happen moneywise?

How am I going to continue to support myself, support my family, pay my bills, pay my rent, all of that?

We’ve heard countless stories of people who say they literally cannot get divorced because they can’t afford it. There may be instances where there is some truth to that, but you will probably confirm that for most people who think that they only think that because they don’t know all of the inner workings and all of the details about their own financial situation. It’s almost like it’s so overwhelming. You don’t really want to delve into it and figure it out because you’re afraid of what you’re going to find when you actually get into it. But if you are brave enough to wade through all of that and figure it out and clear out the clutter, like you said, and organize what it’s going to be, I would imagine it just makes you almost breathe a sigh of relief, like now you can see it clearly. Okay, here’s where it’s lacking. Here’s what I can do about it. You have a path to move forward.

Michelle: Yeah.

T.H.: People are afraid though. People are afraid.

Michelle: It’s scary.

T.H.: I would think that’s the number one thing is I’m not going to be able to handle it though. This isn’t my lane. I don’t know anything about it. You’re already bringing yourself down. I can see that.

Jessica: Yeah.

Michelle: Well, that’s why we get frozen in bad marriages.

Jessica: Mhm. Yeah.

Michelle: So divorce is also a state of mind, not just a state of your balance sheet.

How much do you want independence? Well, if you want independence, and I don’t just mean financial independence… if you want independence, and even if it wasn’t your choice, but you’re going to be independent because he wanted it, you have to at that moment make a choice to the rise up gene. You’ve got to find the rise-up gene. That’s not money, right? That is find the rise up gene and what do I need to figure out. You don’t sit down to a ten-course Italian meal and eat it all at once. The mistake is made when you just sit there and you make money. This multi-faceted, scary, ugly thing that maybe your head was in the sand? Maybe it wasn’t. Maybe you popped it in and out. It’s there, whether you look at it or not. So it’s there! It’s already there! Is it going to get worse?

Jessica: It will if you don’t do anything about it.

Michelle: You better believe it. You better damn well believe it.

Jessica: Okay, so we’re starting off with figuring out you have to actually take a step in?

Michelle: You’ve got to find a seat at the financial table.

Jessica: And be willing to ask the questions.

Michelle: And asking the questions is great because that means there’s your seat, and then there’s claiming your seat. You also need to be staying in your seat.

And you can’t stay in the seat–where women get thrown is when they only know a couple of layers of it. Then somebody that seems smarter says something, and it makes you question yourself again, and then you think you’re either surrounded with bad advice or you’re stupid. It’s like, no, this is a marathon. This is not going to happen in a–my eight-week course is great. It’s not over. That’s the beginning. And so when you were just talking, Jessica, about trying to figure out how I’m going to be able to afford my life?

The number two most powerful thing, number two, this is from all the women, my newly minted CFOs: the budget. We need to establish a new relationship with the word in two ways. One is psychological, right? Budgeting is not an elimination of every single thing you like and want. It is not. T.H. and I talked about this.

It’s shifting from mindless, needless spending to intentionality.

But then there’s also this actual task of budgeting, which there is a big disconnect. And this is where the dysfunction is. There is a disconnect between the tactical task of actually getting organized and putting it together and figuring it out, but then it’s like, it’s strategic too. What do you do with it? Do you know many women, no matter how many commas in their net worth or not, ask me what they should be spending on housing? How much should I buy for a car? What should I allocate for a home? You don’t know the rules.

Jessica: Okay, so how does someone find those parameters? What percentage–

Michelle: I got ‘em! I got ‘em! I got a couple of them. I got ‘em!

Jessica: What’s your recommendation for the percentage of your income for your housing? Or are you getting a debt-to-income ratio?

Michelle: No, we’re not. Please, we’re not bankers in that way, no. What we’re first going to do is understand that there is a blanket rule of thumb. Rules were made to be broken, but you can’t break the rules till you know the rules, right? So let’s start with a rule of thumb: 50/30/20.

Your budget should be 50% needs, 30% wants, and 20% debt reduction or savings.

Then within that, so there’s the blanket, that’s like, awesome, right? This is what’s missing in budgeting. It’s this big blob of a sheet. Okay, great. Let’s now make three columns: 50/30/20. Where does your stuff stack? And where is it off?

Jessica: Okay, so 50% needs, 30% wants, and 20% either debt reduction or savings?

Michelle: Or both.

Jessica: Or both. And then are you saying that within that 50%, you have the autonomy, so to speak, to determine the amount that you’re spending on your housing. It could be 35%. It could be 25%. You have to figure out what are your grocery bills? What’s your electric? What’s your Wi-Fi? Okay.

Michelle: I love you already. You’re hired if you ever leave your day job.

Jessica: [Sings] I’m a CFO. I’m a CFO.

Michelle: [Sings] It only took 12 minutes. It only took 12 minutes.  No, seriously, but that’s what I’m saying. You’re controlling it. It’s not controlling you.

Jessica: Well, and I also love that so much. Because I think that there are times, certainly there are a lot of financial advisors out there who have a little bit more, I don’t want to say structure, but no, okay, listen, you shouldn’t be spending more than X amount on whatever. I love the idea of just saying 50% of your income goes to your needs, and you figure out within that 50% what fits. I like that. Yeah. Do manicures count as a need? I’m just asking for a friend.

Michelle: [Laughs] I think that goes in the 30.

Jessica: Okay, okay.

Michelle: So a sub-layer of that, which is more fun, that’s the baseline we got to start with, but now, I call it your four non-negotiable categories. I want you to tell me what four things you spend money on, that just make you feel whole. And if we can work with those four, that’s where we start to shift from ‘I’ve got to have it all’ to ‘no, no, I’m going to be intentional around my four categories’. Because why budgets fail is because they’re too restrictive. You can’t make a cut across the board. It will only work for a couple of months, just like a diet, and then you go right back to your habits. So, what are the four non-negotiable categories for you?

Jessica: Are those in the 30%? So you’re saying in your wants column of 30%, what are your four non-negotiables? That’s a great place to start.

Michelle: But also–

T.H.: Well, do you know what yours are, Jess?

Jessica: I mean, I’m going to sound really shallow I think–

T.H.: So am I–

Michelle: Oh my god, you’re doing it. You’re apologizing. Why? You are proud of your four categories starting today. What are they?

Jessica: I will say, honestly, nails and hair. I don’t do much with my hair, but I get my nails done every week. I live in New York City, and it’s very easy to find a not expensive place to get your nails done. And I will tell you, those 30 to 40 minutes that I’m in there having my nails done, that’s for me. I really enjoy it. It makes me feel better. It just makes me feel better. I don’t get facials often. I rarely ever get massages. I get my nails done, and I fucking love it. And I will not stop doing it.

Michelle: There, a non-negotiable category 1. Right, great, but not everything if the math doesn’t add up. For some people, the math might add up to spending 100 cents on the dollar. That’s not always typical, right? That’s exactly what I’m talking about. And by the way, one of your four non-negotiables might actually fall into the 50%. Because let’s say for example, for a couple of years post-divorce, as long as it’s not going to blow up your long term plan, there’s a way to say, “you know what, I’m going to overspend here just to mentally stay okay for a year or two.” You can’t do that without doing the rest of this exercise. I call it like, there are three columns in my head all the time with money, and one is, okay, this is typical 50/30/20. We can line everything up. One is such an outlier, and not every column can have an NFW, like, no effing way. You can spend what you want on every–If your columns are all in NFW, you’ve got to move some to the left.

Jessica: That’s right. That’s right.

Michelle: When we can make our relationship with budgets strategic, not torture, and move it into our power to control versus it controlling us, either because we’re scared to look at it, or we’re ashamed to admit it, it’s like, no, this is my spending. This is what it was. It’s there whether you look at it or not. This is super intentional, right? And so then within those categories, there are all kinds of ratios that can be applied. Then we can start breaking some rules, as long as we have all the data morphed around what you need, what your kids need, and what you want. So that is the number two most soul freeing thing that we do.

Jessica: Okay, I’m going to bite. I’m going to say, my nails and hair. I’m going to say Montammy, which is a country club that I have belonged to for like, I mean, 20 years probably. I use the pool in the summers with my kids. I take my kids on the weekends sometimes to Sunday brunch. And my kids really don’t go to camp. It’s a place for us to go, and that membership is worth it to me to have a place to go all summer long to use the pool. I would say…I literally just had something else. It was nails, Montammy…T.H., what are some of yours again?

T.H.: What about the gym?

Jessica: Oh, and the gym. My gym is a non-negotiable, as part of my wants. I pay my gym membership every month, and I belong to a gym that also has a cafe in it and workspace. I can use it for multiple hours a day, not just when I’m exercising. I’ll have to think of a number four, but those are three of mine. The price ranges are totally different, right? From like $13 to 10 times that, but it’s like those are within my wants category. What would you say yours are T.H.?

T.H.: Well, so I did do a trade-off because I used to belong to a gym and have my trainer. Then when COVID hit, I had to do an at-home gym, so I invested in equipment at home, but I won’t give up my trainer. I have been with him for almost 14 years since before my divorce, and he always challenges me. He gives me a gift that is, honestly, priceless. So Jerome’s not going anywhere unless he moves away and then I might have to move. But I also get gray every two and a half weeks right above my eyes, and I can’t stand it. I can’t stand it. I’m not ready to be brave like Michelle. So every two and a half weeks, I don’t have nails as one of mine because it’s torturous for me to sit there and wait for that to dry. I cannot stand it, so I do it at the same time. That’s truly essential. I mean, just if I have to have my nails done for whatever reason. I don’t really know what the other two are. I would say that having money to either go to a show or a weekend away, that also just is really a great thing for me. I love to travel and I love to go to new places. Even if it’s driving distance, I don’t really care. But I would like to spend money doing that either with my boyfriend and/or with my kids.

Michelle: Look at what we just did. Everyone listening, I want you to grab two girlfriends in the next three days, and I want you to sit down, and I want you to have this kind of budget conversation, starting with the fun stuff.

Let’s start with the fun stuff. Grab two girlfriends, and in the next three days, here’s my Wife2CFO challenge to you. I want you the second you leave this podcast, to make those calls, send those texts, and commit to reestablishing a new relationship with your budget in this way, starting with this. Then you can float it up to the 50/30/20 and within that start to–it’s conversational. It’s not just tactical. We’re talking budget strategy here.

T.H.: And there’s no shame or embarrassment about it. I think that’s the number one thing that was challenging.

Michelle: Well, we just had fun talking about it.

T.H.: So, fear, you get rid of it. Just let’s talk about it. You know what? It’s the same thing with anything that’s really hard to talk about because Jessica and I talk about the stigma of divorce all the time. There’s a stigma because nobody wants to talk about it. Because society in general, in the past, in our generation, you don’t get a divorce. You failed, you’ve got to get fixed, you’ve got to figure out how to make it work, and you’ve got to suck it up. And we in our generation are definitely breaking that down. And let’s freaking talk about it. Let’s talk about how to budget. Let’s own our responsibilities. Let’s take charge of our life. Let’s do it in a way that works for us in a healthy way. And even if you’re married, wouldn’t it be great to be able to talk to your husband or your partner and be like, let’s talk about this. What are we spending money on now? I’m building a home with my boyfriend right now. We have this conversation, I think he’s more uncomfortable than I am, and I’m like, where are the numbers? We have to put this in our spreadsheet. I need to know how much I’m contributing because we’re each doing 50%. I need to understand. I don’t want you like, oh, I got this. I got that. We made an agreement. We’re doing this together. So let’s just freaking talk about it. I think that’s the message here.

Michelle: It’s definitely one of the messages. You have to be willing. You have to want to be a CFO. But all marriages end. P.S I hate to break it to anybody, but–

Jessica: At some point, right, whether it’s death!

Michelle: Okay, so I don’t know, maybe we want to learn about the thing that freaks us out the most when we’re not in a crisis? I don’t know, maybe?

T.H.: Right, right.

Jessica: Right, totally. 100%. Okay, so we’re starting off by not apologizing for asking questions with answers we may not know.

Michelle: And switching it to ‘I have a clarification question’ so we’re on our toes, not our face.

Jessica: Right, okay. Then we break it down, the budget, into the 50/30/20, which is fucking genius. I totally love that. I also love the idea of being able to have a conversation with your friends. I mean, look, even though I was like, wow, it’s going to make me sound really shallow, the truth is it’s my wants column. It’s what I want! 

So it is the material–

T.H.: And who’s to judge you?

Jessica: Those are the things. I’m still a nice person. Okay, and then after that–

Michelle: With fabulous nails.

Jessica: With great nails. Then what? You had started off by saying there were three…

Michelle: Yeah, so this one we’re going to take a quick left turn into the investing world and do a mini deep dive. So a huge learning and a huge transformational piece for women is they learn that risk does not mean reckless.

Jessica: Interesting. Okay.

Michelle: Risk does not mean reckless.

Jessica: Women are afraid of risk.

Michelle: But there are risks in our lives that have nothing to do with money. What about the risk of constantly saying yes to people that want to borrow money, and yet you’re afraid to ask for it back, or you’re afraid to get a promissory note so you’re protected? All of a sudden the burden is on you, and you lent them money? We’re generous. Women win the lotto, the first three things they’re doing is taking care of something for someone else.

Jessica: That’s true.

Michelle: Right? So we have to protect us against us, and that’s a risk, a risk of over-supporting children, or supporting children, period. I’m pretty sure you can get loans for college, but you can’t get a loan for retirement. And in the investing world, okay, you’re new at it, got it. You’re going to learn. It’s a marathon. There’s a lot you need to learn first, yes, but risk does not equal reckless. And it is as risky not investing your money as investing your money, especially when we have inflation like we do right now, because boom, by next year, your money’s worth 5% less automatically. Do your bills go down every year? Mine go up.

Jessica: Also, the market is going crazy.

Michelle: Yeah, but we never know that–

Jessica: It doesn’t really make any sense. There has to be a correction. Invest now!

Michelle: Yeah, but like I said in March of 2020, you could not have predicted the severity and the fastness of that. But could you have also predicted that we were going to then have the best 100 days in 100 years? Does anybody? I don’t care how many credentials you have after your name, you’re going to tell me somebody understands timing? I want to meet them.

Jessica: Yeah, right.

Michelle: That’s risky to think you’re going to outsmart the market. To protect the risk in the short term, you’ve just got to make sure what? Oh, you know your budget, so that at least X amount is protected. Because if your portfolio is your paycheck, you need to make sure that there’s protected cash to get you through a couple of bad months or years, right? There are so many ways that go way beyond the scope of our 20 minutes together, that risk does not equal reckless. You’re actually the biggest threat to yourself when you don’t start to understand risk.

T.H.: Yeah, I want to quickly just say that I have not been bringing in any revenue, except thank you very much for all the unemployment all these years. But that’s nothing compared to my salary. But I did sell my home, and that is being invested wisely. A certain amount of money is put to the side, which is what my annual salary would have been, which I have taken, and I’m investing in myself and exEXPERTS, and that’s my salary. I have it allocated for a certain number of years, but the lump sum is then broken out into risk and different categories, so on and so forth. I’m going to give myself a little pat on the shoulders.

Jessica: You go, girl!

Michelle: You’ve got this. T.H., you’ve got it.

T.H.: Yeah. The group that I had been investing with, I did with my ex-husband for an account for my children, and they were always just speaking with him. Then he would just tell me what it was, and it was fine, fine, fine.

Michelle: How shocking.

T.H.: Right, right. But a few years ago, I was like, hey, I want to understand how this money’s being invested. Why aren’t you having a call with me? We’re divorced. This is my kids’ money. I need to learn. And they apologized profusely. I said, you guys, maybe you just weren’t aware because you’re happily married, but as a divorced woman, you have to treat me a little bit–you know, it has to make sense to me.

Jessica: You’re a freaking client. But you’re a client.

T.H.: And you have to invite me to ask questions. And you have to–

Michelle: That’s a whole other show that dynamic.

Jessica: Seriously, we really should–

T.H.: Let’s do that next.

Michelle: That patriarchal dynamic is a whole other show.

T.H.: Let’s do it next. But I’ve taken it back.

Jessica: You need to break through all of that for sure. For sure. Well, I mean, listen, there’s so much more to talk about. We literally haven’t even scratched the surface.

Michelle: We haven’t.

Jessica: We definitely are going to have to do a follow-up on this to dig a little bit deeper. But I mean, I think that there are some practical information and tips that have already come out of this, right? Like, don’t be afraid to ask the questions, and get clarity on anything that you don’t think that you understand, particularly, in not in an apologetic way, right?

T.H.: And then claim your seat at the table. Don’t just have it for a front and then fall back into an old pattern.

Michelle: And it’s okay if your armpits get sweaty. They’re okay. It’s okay.

T.H.: You’re not alone.

Michelle: Right!

Jessica: We’ve all been there. That’s the thing, it’s like you’ve got to start somewhere. Even the professionals, there was a time where they didn’t know it either. Then creating a budget, which I love that it doesn’t have to be as scary or as restrictive as that, and then the idea of you’re going to have to start investing and that’s going to be a long path.

T.H.: Risk doesn’t have to be reckless.

Jessica: I love it.

T.H.: Yes, so many great things we learned from you, Michelle. I cannot wait for a part two.

Michelle: Oh, awesome. I can’t wait either. This was fun.

Jessica: Thank you so much for taking the time and coming on. Everybody who’s listening, you can go to our website and you will find the experts page all about Michelle, where she came from, why we love her, all of her links, ways to contact her, and find the wife2CFO course that she’s talking about, which will surely benefit you, particularly if you haven’t felt like you’ve had control over your finances all these years. Now’s the time, don’t hesitate. Take control of your own life. 

T.H.: I think I’m going to sit down and do the 50/30/20 this weekend. We should do that, Jessica.

Jessica: We could do that together when I’m out there.

T.H.: Yeah, we’re going to do that this weekend.

Michelle: I love it.

Goodbye: For everyone out there listening, if you know anyone at all who would benefit from what we talked about today please share this episode and everything exEXPERTS.  Be sure and click to subscribe, rate, and review our podcast wherever you listen to your podcasts and please follow us on social media @exEXPERTS Divorce etc… on Instagram, Facebook TikTok, and YouTube @exEXPERTS, and our website at  Thanks for listening!


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