Divorce Coaches Academy

Dollars and Decisions: Why Every Divorce Coach Needs Financial Confidence

• Tracy Callahan and Debra Doak • Season 1 • Episode 158

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Afraid you need to be a financial expert to help divorce clients navigate money concerns? Think again! Tracy and Debra dismantle this common fear among divorce coaches by showing how you can effectively support clients through financial challenges without overstepping your role.

Financial uncertainty triggers our most basic survival fears—that's why money is almost always at the center of divorce conflict. According to government research, men's household income falls about 23% after divorce, while women experience a staggering 41% drop. No wonder financial anxiety runs so high! When clients worry about their ability to pay bills or put food on the table, their capacity to make sound decisions, negotiate fairly, or co-parent effectively becomes severely compromised.

The podcast reveals how coaches can guide clients through creating monthly budgets—arguably the most powerful financial tool during divorce. This simple exercise answers the burning question: "Can I support myself?" Through relatable client stories like Martha (who discovered her post-divorce budget was actually half what she feared) and Mary (who reconsidered keeping the family home after seeing the long-term financial impact), Tracy and Debra demonstrate how helping clients gain financial clarity transforms fear into knowledge and powerlessness into control.

They explore practical approaches to addressing income concerns, understanding the marital estate, and preparing clients for productive attorney consultations. Most importantly, they emphasize that coaches don't need calculators or financial certifications to make a difference—they just need to ask the right questions, guide clients through basic exercises, and connect them with specialists when needed.

Ready to feel confident helping your divorce clients with financial foundations? Listen now to discover how you can support clients in making informed, intentional decisions that align with their values and set them up for post-divorce success.

Learn more about DCA® or any of the classes or events mentioned in this episode at the links below:

Website: www.divorcecoachesacademy.com
Instagram: @divorcecoachesacademy
LinkedIn: divorce-coaches-academy
Email: DCA@divorcecoachesacademy.com

Tracy:

Welcome to Divorce Coaches Academy podcast. I am Tracy and I am here with my fave partner, Debra.

Debra:

Does your husband know I'm your favorite partner?

Tracy:

I know, who?

Debra:

Who, good old what's his name?

Tracy:

I don't know. So we're talking about something that scares a lot of divorce coaches today, helping clients with financial issues. White knuckling that. So if you've ever worried that you need to be a financial expert to help divorce clients navigate money concerns, this episode is for you. Many, many coaches shy away from discussing finances because they worry they will give incorrect advice or step outside of their lane. Two things we don't do.

Debra:

Two things we don't do, but here's the truth. You do not need to be a CDFA or a CPA or a QRZ or any kind of financial advisor to help clients understand the basic financial concepts of divorce. What your clients need most is someone who can help them organize their thoughts, manage their fears and prepare them to make informed decisions. So here's what we're going to do today. We're going to share some practical ways you can support clients with these financial foundations, from budgeting to understanding their marital estate, even if you don't consider yourself a money person and calculators make you queasy, right. So let's dive in.

Tracy:

I would be lost without my calculator.

Tracy:

And thank God it's a feature of an iPhone, right, you don't even have to have a separate thing. Okay, so let's talk about why money fears lead to conflict. When we talk about conflict and divorce, money is typically almost always at the center. Why? Because financial uncertainty triggers our most basic survival fears. When clients worry about their financial future, their ability to think clearly and make good decisions diminishes significantly. Their reality is sobering. According to research from the US Government Accountability Office, after divorce ... this is a hard statistic ... men's household income falls about 23%, while women's falls by a staggering 41%. So no wonder money creates so much anxiety.

Debra:

Yeah, I can't be dreaming about this wonderful new future if I'm afraid I can't buy groceries or put a roof over my head.

Tracy:

Maslow's hierarchy of needs baby Absolutely.

Debra:

So, divorce coaches, here's what I want you to grasp - when your clients fear they don't have enough money to survive, they can't focus on negotiating fairly or co-parenting effectively. These financial fears are going to activate their fight or flight response. That is why helping clients establish financial clarity is one of the most powerful ways to reduce conflict in divorce. So again, let's go back to Maslow's hierarchy of needs. If they can't pay the rent, if their nervous system is unsettled, they can't show up as their best selves, they can't dream about this new future. So when you help your clients understand and get some clarity about their financial situation, you're not just crunching numbers, you're addressing their fundamental safety and security needs. All right, so let's start with a question I often ask clients: "ow much do you want to spend on your divorce?

Tracy:

I love this question, yep and it's not a trick question.

Debra:

It's not. It might sound like it, but it's about intention, right. So we have to ask our client do they want a scooter divorce, a Kia divorce or a Lamborghini divorce? Because that's the difference between $5,000, $20,000, and $200,000. And the reality is this that I think people don't understand is that the average divorce costs right now in the US about $20,000 per person and takes 12 to 18 months.

Tracy:

Yeah, Most people believe that that initial retainer is going to be their whole divorce.

Debra:

Yes, $5,000 in 90 days, whereas the reality is very different. And add in a custody battle and guardian ad litems and custody evaluations and blah, blah, blah, blah, blah - Easily six figures. Here's where coaches make a difference by helping clients be intentional about the process they choose and their actions. And staying accountable to this idea of how much do you want to spend on your divorce, how much you have available.

Tracy:

Yes, and according to lawyerscom, about 67% of people hire attorneys for their divorce. But not all approaches cost the same. Your guidance can help clients choose wisely among options like mediation, collaborative divorce or traditional litigation. But when clients have clear financial expectations, they can make better process choices. Because there's this awareness, it's not that fear right. Most people are scared to death to go into mediation because they have financial concerns. This is why discussions about divorce costs should not be avoided. They need to be front and center. We can ask our clients how much do you want to spend on your divorce? How much money do they have access to for legal fees? What's the opportunity cost of spending that money on divorce and what do they hope to gain by spending more? It's one of our favorite questions. By framing these questions, you're not giving financial advice. You are helping clients clarify their priorities and make conscious choices, or what we like to talk about as informed and intentional.

Debra:

Yep Decisions.

Tracy:

Yeah, so the single most powerful financial tool you can help your clients create is a monthly budget.

Debra:

Ooh, the B word.

Tracy:

I know. Well why is that so. It's because it answers their most burning question and gives them a decision-making filter for everything else. According to a survey by the Penny Hoarder, 56% of Americans don't know how much money they spent last month.

Debra:

That's terrifying to me. It is. That's absolutely terrifying to me.

Tracy:

And, interestingly, people who make less than $50,000 a year are less likely to keep a budget - exactly who needs it most. So here's why budgets matter so much in divorce. They show clients if they can support themselves and what lifestyle changes they can expect. It reveals whether they need to consider earning more income and helps determine where they can afford to live. They're able to establish a need or ability to pay for spousal support discussions and encourage sort of this forward-thinking process about things like insurance costs, doing that research to look at different health care plans and, most importantly, they reality test assumptions clients might be making. And we see this all the time, right, my favorite language, the lifestyle I was accustomed to. Yes, the reality is is that in divorce, the finances are going to change. Two households are more expensive than one household.

Debra:

That is very true and I'd love it if you would share about your client, Martha, because I think her story really, really illustrates the power of budgeting in divorce and it will illustrate for our coaches how much impact this kind of work has with the client.

Tracy:

When I met Martha. She was 38 years old, a stay-at-home mom with two young children, living in one of California's most expensive areas. Okay, so not an unfamiliar story, by the way. She was convinced she needed an epic legal battle to get enough money to live independently from her yes, abusive husband. And when we created her budget, we discovered something really interesting. Her marital lifestyle expenses were about $14,000 a month, but her post-divorce budget, accounting for a more modest but still meeting her needs, comfortable lifestyle, was about $7,500. Suddenly, support calculations looked more achievable than she had imagined. Martha's transformation in her thinking was remarkable from feeling powerless and afraid to knowledgeable and in control. Even though it was different, okay, the budget wasn't just numbers - it was a roadmap to her desired outcome - her freedom away from this abusive marriage.

Debra:

Right, and it's such a powerful example because it shows her options, so she's not helpless. Now she has options she can choose from, And as coaches, you don't need to be accountants to help clients with this. You just need to guide them through listing their living expenses in categories like household, that's, their mortgage, their rent, their utilities, maybe their personal expenses like groceries, eating out, buying clothing, medical costs, auto expenses and things like that.

Tracy:

And I want to add, this is not an unfamiliar task for most people going through a divorce process, because in the United States, every state has some form of financial disclosure that happens, which also does include an identification of these expenses. So this is something that they're going to probably, more than likely, have to do anyways.

Debra:

Anyway, you're helping them get a jumpstart on it. Yes, right, and improving financial literacy, especially for those partners that haven't been involved in the family finances. When you improve their financial literacy, you reduce their fear. And what do we know? If we have less fear, we have less conflict.

Debra:

Okay so, and this doesn't have to be perfect, we're looking for ballpark figures right now for a decision-making filter to help with planning, to think through things. We don't need to know that the electric bill is $127.16. We can ballpark it at $100 to $150. We're just getting close. So here's a scenario that's not unfamiliar. You have gone through this example, like you did with Martha. And what happens if their budget shows they'll have a shortfall after divorce? Okay, so this is where the coaching comes in.

Debra:

There are four main approaches and you can walk through step by step with your client to see, kind of, where their tipping point is and what decisions they want to make. So first, cut expenses. Help them identify what's essential versus discretionary. What are they willing to do? Second, earn more, explore income opportunities. You can help them with that. Third, look at the marital estate for proposal opportunities. Maybe a lump sum from property distribution could provide some breathing room for them temporarily. And fourth, get professional help to estimate support numbers. So an attorney consultation can be invaluable at this step if child support or spousal support is going to be a big component of their budget.

Tracy:

Yeah, okay, so let's talk about earning income. Many clients worry that if they start earning money, they'll get less support. And while that might be true, in some cases, there are many benefits to financial independence that outweigh this concern.

Debra:

I like your tone of voice when you're saying that.

Tracy:

I do, and I'm sorry.

Tracy:

I do have a feeling about this because support is not guaranteed. Okay, their ex can maintain power over them through money.

Debra:

Yep.

Tracy:

They're protected if support payments become inconsistent and they build confidence and self-sufficiency in that financial independence and not dependence on support.

Debra:

Right, if that child support payment is five days late and that means you can't buy groceries, who's still in the driver's seat here? There's still financial control.

Tracy:

What happens if your uh, your ex loses their job and is unable to pay the child support or the spousal support? What if they got injured? There's so many variables and factors, so one of the things that we like to talk about is that financial independence. So for clients who need to start earning or increase their income, we can help them explore these questions. What have they done in their past? What do they love doing? Who do they know that might help them with opportunities? How much do they need to earn? There are lots of resources for immediate income opportunities. We've expanded our reach now. Virtual assistant work, selling crafts on Etsy, working at their children's school, pet sitting, cleaning houses, childcare, customer service work right, those are wonderful, immediate, accessible places for most people. Right, and especially, even maintaining our role as parents. For longer term planning, they might consider updating any certifications, going back to school, completing a degree, getting training for a new career or even starting a small business.

Debra:

I did all of the above.

Tracy:

I know you talked about it.

Debra:

I did pet sitting, I did child care. I cleaned houses and I got training to start a new career.

Tracy:

Yeah.

Debra:

But I had to pay the bills while I was building my new career, and so guess what I did? Whatever it takes. I tell my clients sometimes we do what we have to do until we can do what we want to do.

Tracy:

Yes, yes, and once your client has a clear budget, the next step is helping them understand what's on the table to be divided, and this is what we talk about as the distribution of the marital estate in divorce. A study showed that the assets of married couples in their 50s are four times greater than those of their divorced peers. So this stark contrast highlights how critical it is to make thoughtful decisions about property division. The marital estate can include everything of maritally accumulated real estate: Homes, vacation properties, rentals, bank and investment accounts, retirement accounts and pensions, businesses, vehicles and other personal property. And debts: mortgage, loans, credit cards, medical bills. Dividing marital property isn't as simple as cutting everything in half right. We like to compare it to playing with Legos. You're building an agreement, brick by brick, choosing the right pieces until you get it right. We like to look at the forest and not get caught up in the trees.

Tracy:

So when we talk about equitable distribution, equitability looks and feels in multiple different ways.

Debra:

So let me give another client illustration here. I had a client we're going to call her Mary. She was a 51-year-old part-time bookkeeper and she had teenage twins. She came in, which is pretty typical, adamant about keeping the family home, at least until her kids graduated high school. And her intention was to trade her share of the husband's retirement for the house. It's pretty standard. People think that's a good plan.

Debra:

But we went through step by step and we analyzed this proposal. We actually analyzed what would it look like if Mary kept the house, if her husband kept the house, or if they sold it. And what we realized was if she kept it, she would be house rich but cash poor. This home had high maintenance costs, high taxes, and then she'd end up having almost nothing for retirement. And that's a different position for somebody who's 30 than somebody who's 51. So when she was able to see these numbers and again, guys, this isn't high level financial planning, this is just kind of looking at a few numbers on a paper, it really helped her change her mindset and reconsider her position. She ultimately decided to sell the house and take a balanced portion of retirement assets. This gave her both cash flow and future security.

Debra:

The key here is helping clients distinguish between short-term emotional attachments and priorities and long-term financial stability. We know everyone has a status quo bias. Everyone has a loss aversion bias - that's built into divorce. And our job is to kind of help clients work through those to make sure that they don't make decisions today that impact them negatively in the future. A gain, our role isn't to make these decisions for them. We're not an advisor, but just to help them paint the whole picture so they can choose wisely.

Tracy:

Yeah, so they can start making informed, intentional decisions. And another thing, this is going to be a little converse in what most people think. Most people think, oh, I'm going to go into an attorney consultation and they're going to help me understand my financial situation. When, in fact, it should be the opposite. Attorney consultations are invaluable for getting support estimates and case-specific legal advice. But we can support our clients being prepared for that process by having their budget completed first and creating this list of major assets and debts before they go into that process. They should also prepare specific questions about those unique circumstances and understand that this is an information gathering session, not necessarily quote, unquote a hiring decision. So being prepared is really, really important. And then going in and being able to utilize those consultations effectively. And certainly they should get multiple consultations. But anybody walking into a consultation being prepared with the information that they have is key, crucial crucial.

Debra:

It's garbage in, garbage out right. The better prepared you go in, the more accurate and informative decision-making data you will walk out with.

Tracy:

Absolutely.

Debra:

So we're going to help clients prepare for those consultations with their budget, with their list of assets and debts, with their list of case-specific questions. Maybe there is some separate property that needs to be sorted out, or they have a specific question about a special needs child, I don't know but we're going to help them identify that. And then, after each consultation, we can help them process what they learned about their case, what they learned about likely outcomes, and help them determine how this might affect their planning and decision-making. Once they have those support estimates, they can add those numbers back to their budget to see if the math works. Especially if they're a lower earner or stay-at-home parent, the income part of their budget is going to look pretty sparse until we fill in some support numbers. So now we've got what we need to see if the math works or what decisions we need to make.

Debra:

Knowledge is power. We know that.

Tracy:

Knowledge is power. Knowledge is power.

Debra:

It reduces fear, it manages expectations and it assists with proposal development. So remember the study we mentioned earlier? It showed that 73% of divorced women do not regret ending their marriages, even though they're financially worse off. Okay, again, what is this? Yeah, I mean, we're just making decisions here. What would you rather live with less money or that partner? But we need the data to support that decision. So this tells us, really, that divorce coaches are not just helping clients with money. We're helping them reclaim their lives. When you support clients doing this foundational financial work, you're doing more than crunching numbers. You're giving them clarity and confidence to move forward. You're helping them transform fear into knowledge and powerlessness into control.

Tracy:

Yes, and helping them align what is it that their needs are, their values are, and making decisions related to such. And you don't need to be a financial expert to do this work. You just need to be able to ask the right questions, guide clients through basic exercises like budgeting and asset identification, as well as debt identification, and connect them with specialists when they are needed. So, if you are part of our coach community at Divorce Coaches Academy, please check out our recording of our latest Lunch and Learn session with CDFA Alyssa Miller. She shared a ton of great information that will help you get a better understanding of all the financial issues in divorce and the role a certified divorce financial analyst can provide. The most valuable thing you offer isn't financial advice, and that's because we don't give advice. It is a structured approach to facing financial realities and, as we talked about, financial issues is a core source of conflict.

Debra:

Realities. That's what we're talking about here managing expectations and reality testing things for clients.

Tracy:

Yeah, and when clients understand their financial decisions, we're going to say it again, they make better decisions, they negotiate more effectively and transition into their new lives with greater ease. Yep, so no advice giving, just helping with that awareness piece to then be able to look at and generate options, which leads us into proposal development.

Tracy:

That's a whole other podcast that we other did.

Debra:

If you want to know a little bit more about proposal development, go back and listen to the episode, I don't remember what number it was, but we took a Goldilocks approach - Too hot, too cold, just right.

Tracy:

So we want to thank you so much for again joining us today. Hopefully this helped you, as a divorce coach, feel a little more comfortable in the work that we do in supporting clients in this financial decision making, while still recognizing that there are expert perspectives out there and guidance if needed. But they need to be able to be prepared to go into those, and that's our role. So we want to thank you so much and until next time. Remember, knowledge is always an antidote to fear and just makes us better practitioners. Thanks so much.