It is time to have money; just feeling like you have money will no longer do.

Originally seen in USA Today and The Indianapolis Star

Dear Pete

I have nothing. My husband of 37 years filed for divorce, and I have nothing. I felt like we always seemed to have money, but apparently we didn’t have anything. He says I'll receive about $50,000 of his retirement account, but that’s it. I make $48,000 per year, and I have the option of keeping our family house. Our children are grown, and the house is way too big for me to live in alone. My friends keep telling me to live there because there isn’t a mortgage, but the house is older and will eventually need significant repairs. If I sell it, my husband and I will split the money. I’ve never dealt with finances before. He’s always done it. I don’t know what to do, and my friends keep give me conflicting advice. I’m not even sure if I want to use a lawyer. How will I ever retire?

Nancy, Knoxville, TN

It’s going to be OK, Nancy.

Your financial life will undoubtedly be much different from what it was over the past several years, but that isn’t necessarily a bad thing. For one, you will never be in the dark again. For years, you may have found comfort in not knowing your financial reality. But going forward, you will find comfort in facts. You will need to rebuild your financial life from the ground up. And while that sounds terrifying, if done correctly, it’s empowering.

As you’ve already discovered through this process, your emotions are likely running high. I generally don’t like when people make financial decisions in the midst of extreme emotions, but then again, you don’t really have the luxury of letting your emotions cool. If you have particular friends who tend to spark the emotional flames every time you talk to them, avoid them. You can indulge in those complicated conversations once you take care of financial business. Sadly, I’ve seen many divorcees waste valuable time and money by entering an echo chamber of negativity. Frankly, you don’t have enough money to let time heal your financial wounds.

You need an attorney. Don’t misconstrue that as legal advice, or any of the rest of this answer as legal advice, but you need an attorney. By your own admission, you haven't dealt with money in nearly four decades, you thought you had money, but you don’t, and a mortgage-free home is being dangled in front of you. An attorney will provide a sound, experienced mind to walk you through the particulars. If you haven’t already, ask others you know who are divorced about the attorneys they used. Hopefully you can find help via a referral, which will help your comfort level.

I don’t have all the details of your situation, but from what you have shared with me, keeping your home could be a disaster. It’s great your home is paid off, but if the home is too big, thus too expensive to heat, cool and maintain, then you’re better off selling the house and taking the money from the sale. Besides, your new financial life will be built on your income and your income alone. The home you select to live in, whether you rent or buy, will be affordable by your income’s standard. You probably aren’t going to feel like you have money. But that’s OK. You felt like you had money before, and that got you nowhere.

Run, don’t walk, run to AnnualCreditReport.com and get your credit report. When you wrote, “We always seemed to have money, but apparently we didn’t have anything,” my alarm bells went off. I know your mind is on the money you don’t have, but your mind also needs to be on the money you really don’t have — the money you potentially owe. The chasm between feeling like you have money and having money is littered with danger. When most people express the feeling of having money, they mean they have stuff. People who actually have money don’t feel like they have money. They just have money. There’s no feeling associated with it. It’s not a guess. Your credit report will let you know whether your husband used your information to open credit lines in your name. You will need to systematically separate your credit records from his, as soon as possible. Your attorney will help divide up not only the assets from your marriage, but also the debts.

Retirement is another issue altogether. Your chance at retirement will come in the form of preventing income dependency. As you rebuild your financial life, be sure to make decisions that don’t force you to work forever. You won’t be retiring because you have a bunch of money. You’ll be able to retire because you won’t need a bunch of money. This will be a huge mindset shift for you. Frankly, it’s a huge mindset shift for anyone.

Whether you take your soon-to-be ex-husband’s or your own, Social Security retirement likely will be the core of your retirement income. If you wait until age 70, the monthly benefit will reach its maximum value. Your focus should be to craft your financial life around that core income. You will absolutely need to supplement Social Security income with income derived from the retirement assets you’re going to build.

It is time to have money, Nancy. Feeling like you have money will no longer do.

Have a question for Pete the Planner? Email him at AskPete@petetheplanner.com or visit www.petetheplanner.com.