A Certified Financial Divorce Analyst shows women how to save money, time, and angst during one of life’s most difficult transitions
By Marguerita Cheng
Hope Katz Gibbs: Hello and welcome to the interview that is launching Marguerita Cheng’s new book, Finance Rules: Divorce Matters. As the founder of Inkandescent Publishing, I’m thrilled to have the opportunity to publish her book which shares her decades of insight into the challenging process of never cutting what you can untie while going through the life-altering experience of breaking up a marriage.
Clearly, Rita’s work as a as a Certified Financial Planner® makes her the perfect person to offer financial guidance to couples who are going through this life-changing experience. In fact, the founder and CEO of Blue Ocean Global Wealth is a Certified Financial Divorce Analyst who has written about divorce matters for Forbes, CNBC, AARP, and other popular magazines and organizations that highly value her expertise.
Helping women, in particular, has long been Rita’s focus. She serves as a Women’s Initiative (WIN) Advocate and honed her leadership skills as president of the Financial Planning Association of the National Capital Area. In 2020, she was named one of Maryland’s Top 100 Women by the Daily Record. She is also one of the “Most Influential Financial Advisors” in the Investopedia Top 100, a “Woman to Watch” by InvestmentNews, and a “Top 100 Minority Business” by the Capital Region Minority Supplier Development Council.
Rita’s current book, Wealth Management Rules, offers a dozen essential tips to help women harness their financial know-how. In this Finance Rules: Divorce Matters, she will guide women and men through some of the stickier financial issues that come up during the divorce process. Her new book will also be part of the Why Divorce project that I’ve launched this summer through Inkandescent Publishing.
So Rita, let’s get started by telling us about this new book, starting with what inspired you to write it.
Rita Cheng: First, I want women to know that they don’t have to go through the divorce experience alone. They can build a team of professionals to help guide them through one of life’s most difficult transitions. For my part, as a Certified Financial Divorce Analyst, I help women assess their financial circumstances so they can build the life they want and deserve. I think of it as the three Vitamin Es: Engage, Educate and Empower.
Second, I want women to know that divorce does not have to define you. It does not have the social stigma today that it has had in the past. I reflect on the fact that it was only 100 years ago that the US passed the 19th Amendment, giving women the right to vote.
Before then, life was incredibly challenging for women in a myriad of ways. For instance, I am a fan of the book of essays, How We Get Free: Black Feminism and the Combahee River Collective — especially one of the stories by activist and scholar Barbara Smith who shares that when she graduated from college to begin her graduate work at the University of Pittsburg, she could not purchase a portable electric typewriter on credit because she could not apply for credit in her own name as female.
As a Mom of a recent college graduate, Barbara’s story really spoke to me because I can’t imagine a world where my daughter would have such limits placed on her ability to succeed academically or professionally.
Mostly, I hope this book helps to remind women how far we’ve come. We now not only have rights, we have the responsibility to stay in charge of our financial health. Certainly, no one plans for a divorce when they marry, but I believe women who find themselves in unsatisfying marriages can and should move on so they can create even better, more fulfilling lives. My goal is for this book, and my experience, to be a resource.
Hope: We know that the statistics are staggering around the divorce rate in the US. Between 42-45% of first marriages end in divorce — as do 60% of second marriages, and a whopping 73% of third marriages. So what are the financial needs of a divorced woman vs. a married one?
Rita: I have always said that it is important for all women — regardless of age, race, ethnicity or relationship status — to assume a more active role in their personal finances. As one of my clients so eloquently told me: “I have to pamper myself because if I don’t, who will?”
She continued: “I also know I must assume responsibility for my future, in all ways. I know there are a lot of people who depend on me, but I have to make sure that I put on my financial life jacket and plan for my future first so that I’m able to help those I love.”
Unfortunately, she is in the minority. Too often, women prioritize the needs of others ahead of their own.
Hope: You’ve said many times that in your experience too many women don’t even think about consulting a financial planner to help guide them through the experience. In fact, a recent study finds more than 95% of women go it alone in this essential area that is fundamental to their financial future. Why do you think that is, and what are the consequences?
Rita: I think it’s simply because most women don’t realize that a financial advisor can benefit them immensely, especially if they engage with a CFP® early on in the divorce process. In fact, a recent study on this topic reveals that 61% of women said that they wish they would have known to use a Certified Divorce Financial Analyst™ (CDFA).
It’s as valuable and important to them and their attorneys because the role of a CDFA is not to give legal advice or draft the legal documents. We help the client and attorney understand the financial impact of the decisions.
For example, a CDFA can help women gain a better understanding of their expenses both before and after a divorce — especially if they haven’t been involved in paying the bills, managing investments, buying insurance, or budgeting.
Hope: What are some of the hidden gems in a woman’s portfolio that they might not know to watch for?
Rita: A few big-ticket items you may not have thought about include the marital home, engagement and wedding rings, other fine jewelry, heirlooms and antiques, bank and retirement accounts, and college savings accounts.
Hope: In addition to the staggering statistics about the number of US divorces, research shows that the average age of a first divorce is 30. Talk about the challenges that younger couples have when divorcing?
Rita: If a marriage has been relatively short, often mediation or a collaborative divorce may be easier and most appropriate. But is an emotional process, and even couples who think the divorce process might be simple, for instance those without children, may want to consult with professionals.
I firmly believe that couples with young children should not engage in a zero sum game and try to understate their assets or withhold income to avoid providing spousal or child support without a team that includes an attorney and CDFA. It’s essential to avoid in engaging in destructive behavior that will only make it more emotional and financially difficult for your children. For example, I know of one couple that could not agree on a 50/50 split. They spent more than $200,000 in legal fees, only for the court to tell them that 50/50 was reasonable. Now, the money that was to go toward the college education of their three school-aged children has gone to the lawyers.
Hope: Talk about the challenges of divorcing when 50 or older, a situation you refer to “Grey Divorce.”
Rita: The post-World War II generation is setting new records for divorce: Americans over 50 are twice as likely to get divorced as people of that age were 20 years ago. Divorcing later in life, known as “Grey Divorce” presents unique challenges because there is more to split up: retirement security, Social Security benefits, spousal support, division of assets, adult children, long-term care, estate planning and taxes.
Hope: Wow, Rita, this is such wonderful information — and I’m thrilled to tackle this topic with you as the publisher of your new book, “Finance Rules: Divorce Matters.”
Stay tuned for more: We’ll be sharing the video and article on the homepage of your website, which my InkandescentPR.com team had the honor of building and launching for you: www.MargueritaCheng.com. We’ll also be showcasing this and future video interviews on your website and www.Inkandescent.tv, and as podcasts on www.InkandescentRadio.com.
In upcoming issues of Rita’s monthly magazine we’ll feature chapters of the book. These will include case studies will include:
- Don’t ever quit a job for a man: Insights from an octogenarian
- She was a stay-at-home mom: Now what?
- He was a stay-at-home dad: Is the situation any different than a stay-at-home mom?
- He won’t get off the mortgage: why, and what’s the problem with that?
- They lit $200K on fire: the lawyers benefitted but now there’s no money to invest in their children’s education. How can that be avoided?
- And more!
If you have questions that you’d like Marguerita to address, send us an email. Click here to pre-order Rita’s new book.
We look forward to talking with you again next month!