Using Money as a Weapon (Emotional Divorce Mistake # 1)

The emotion of anger is all too common during (and even after) divorce. You might absolutely be justified in feeling this way, especially if your soon to be ex has deeply wronged you. The trick is to allow the anger to move through you in a productive way, without hurting yourself or others. Unfortunately, I see divorcing women using money as a weapon. If you’re tempted to do this, remember anger is a two-edged sword that cuts both ways. And it can cause you significant financial damage!

Several years ago, I chatted with a frustrated financial planner who unsuccessfully attempted to talk his client “down from the ledge” regarding her money decisions. As part of her divorce settlement, this woman received half of her husband’s 401(k) funds. She reasoned because the “no-good-bastard” cheated on her with her best friend, she deserved to spend $50,000 of “his retirement money” on a red BMW convertible. Every time drove her “revenge car” to his house to pick up or drop off the kids, it would be a rub in his face.

Her financial planner pleaded with her not to withdraw $50,000 from the 401(k) to buy the convertible, but his client, in her anger, wouldn’t listen. By cashing out part of the 401(k) money, she owed taxes and penalties, to the tune of 40%, a $20,000 tax bill! This means the convertible essentially cost her $70,000!

The withdrawal also meant she had substantially less money for her retirement. A quick run through an investment calculator would show her the $50,000 invested at 8% over 20 years would be worth $233,000 at retirement. Yikes! How do you like that car now?

Of course, this woman’s anger is justified. But, what would be a better course of action if you’re feeling this way right now?

Talk to a counselor or therapist as a constructive outlet for your anger. Take up a physically taxing form of exercise like kickboxing, running, weight training, or CrossFit. This allows the angry energy in your body a positive outlet that actually benefits you. And go ahead and spend a reasonable amount of money on yourself as a reward for making it through the divorce! Rather than buying a $50,000 Mercedes, maybe my friend’s client could’ve spent $5,000 on a Louis Vuitton handbag or a yoga retreat in Bali. She would’ve had a sense of satisfaction without the major financial damage!

“I wish people had a longer-term perspective of what the divorce really means,” says James Lenhoff, CFP, and Founder of Wealthquest.?“I think women see the divorce as the end of the relationship.?It’s actually the beginning of a new, and very strange version of the relationship. Your ex will still be very much a part of your life, especially if you have kids. You need to be prepared for how you’ll think and in feel in that new version of relationship.?Money can become a weapon, and it can be used as a weapon for a very long time in this new stage.” James adds, “You need to know how that works and be ready for it, if your ex decides to use it against you.”

When you see red and lash out financially at the height of your anger, you’re putting yourself in dangerous territory. Give yourself 24 hours to calm down before you respond. No one wins when money is used as a weapon, even if you’re the one wielding it. Revenge clouds your judgment, poisons your emotions, and taints your relationship with money.

Your long-term success with money is truly the best “revenge.”?

P.S. Need help managing your emotions and personal finances as you navigate divorce? Let's chat and see if I can help.

(This is an excerpt from my soon to be published third book, Financial Dignity? After Divorce: A Woman's Guide to Healing Her Relationship with Money. Coming in April 2022!)