$550k in debt after divorce: one woman's journey from shame to empowerment

·Writer and Reporter
·9 min read

Jenny D., a public information officer, thought she and her now ex-husband were buying a house they could afford when they moved from the Midwest to outside of New York City.

“We thought we were making an investment,” Jenny tells Yahoo Life.

But between a job loss and growing family, the couple found themselves “kind of underwater” and living paycheck-to-paycheck, with mounting credit card debt and neglected mortgage payments.

“My biggest money mistake was probably assuming that I was always going to make or have the amount of money that I thought I would,” Jenny says.

“It wasn't like we ever thought we bit off more than we could chew,” she recalls. “It just was that life happened, and then income stopped coming in and it was like, ‘OK, wait a minute. We're living way beyond our means here. How are we gonna fix this?’”

Financial coordinator Angela Matthews tells Yahoo Life it's not unusual for well-intentioned couples to get tangled up in money mistakes while trying to live their best life.

"I often come across people who had to learn tough lessons because they had to live their own life experiences,” Matthews says.

Jenny (Photo: Courtesy Jenny D.)
Jenny D., a public information officer, says she and her now ex-husband thought they were making an investment when they purchased their home outside of New York City. (Photo: Courtesy Jenny D.)

The couple stopped making mortgage payments, and by the time the bank foreclosed on their home their total debt — between the mortgage and credit cards — amounted to $550,000. Jenny says the experience was “horribly embarrassing” and that she felt too much shame to talk about it — even with her husband.

“We didn't really talk about that stuff too much together,” Jenny says of their financial situation.

“Sometimes I would look at the bills and I'd just put them in a pile and I wouldn't touch them for a month.”

In the midst of their financial troubles, Jenny says their marriage began to unravel. The divorce and foreclosure of their home “kind of happened around the same time.”

“A lot of couples enter into divorce and sit down with the divorce lawyer and be like, ‘We're gonna split our assets,’ or ‘I'm taking this and you can take that.’ We basically put all our stuff on the table and said, ‘Alright, how much debt are you gonna take on,’” Jenny says.

The bank eventually foreclosed on their home when Jenny and her now ex-husband stopped making mortgage payments. “We didn't really talk about that stuff too much together,” Jenny says of their financial situation. (Photo: Courtesy Jenny D.)
The bank eventually foreclosed on their home when Jenny and her now ex-husband stopped making mortgage payments. “We didn't really talk about that stuff too much together,” Jenny says of their financial situation. (Photo: Courtesy Jenny D.)

But Jenny says this shared load also helped them as they transitioned out of the marriage and towards the common goal of raising their three sons in a stable, “peaceful” environment.

“We didn't have assets to split. We had debt to split. And so I think that helped us as we started to work together as co-parents.”

It has been eight years since the divorce and foreclosure, and after tightening her budget and working two jobs, Jenny says she’s finally out of debt. While she’s “still living paycheck-to-paycheck,” Jenny says she has finally started to heal from the trauma and shame she felt around money problems. She used to hate talking about money, but Jenny says she and her ex-husband now speak more openly about finances when it comes to raising their teenage boys.

“We've created this environment where we can be honest with each other,” she says.

And Jenny is using the lessons she learned from her marriage to avoid making the same mistakes in her current relationship, too. Jenny says that she has always been upfront with her partner of more than two years about money matters — even when it’s “scary.”

“From the very beginning, I was very honest with him about, ‘[These are] my finances. This is what I have. It took me this many years to come out of debt.’ And that is a very vulnerable, scary thing,” Jenny says.

Jenny believes she inherited a lot of her ideas about finances from her own parents’ marriage. She says she grew up knowing “every ounce” of their financial difficulties, and she was determined not to burden her kids with the same mental load.

“I watched them from a very early age fall up and down the scale of having money, not having money, losing a job, getting a job and living from a place of fear around not having enough or trying to ‘keep up with the Joneses,’ so to speak,” Jenny says.

(Photo: Courtesy Jenny D.)
Jenny D. is now focused on teaching her three sons good financial habits. (Photo: Courtesy Jenny D.)

Now, she and her ex-husband are trying to break the cycle of money mismanagement by teaching their sons to be financially savvy.

“It's very important for us to make sure our children are set up to not go down the same path.”

Their eldest son, who was 10 years old when they divorced, is getting ready to go to college this fall, and Jenny says a few hundred dollars of the money he makes from his after-school job each month goes towards his car expenses and a savings account for college.

“The bigger picture with them is really trying to get them an understanding of, ‘OK, I'm making this money and that's awesome. But I also have [a] responsibility to pay for what I'm doing, with my parents's support and help,’” Jenny says of her kids.

(Photo: Courtesy Jenny D.)
Eight years after her divorce and home foreclosure, Jenny has paid off her debts. (Photo: Courtesy Jenny D.)

Financial coordinator Angela Matthews says there are more ways that Jenny and her ex-husband — and all parents — can raise their kids to prioritize financial wellness and help them build a solid foundation for adulthood. Here are some of the top tips she shared with Jenny and Yahoo Life.

‘Evolve the conversation’ around money as your kids get older

While it’s important to begin discussing money matters with kids while they’re young, Angela says parents should “evolve the conversation” as they get older. Helping teens figure out their “financial values” can help them stand firm and make better decisions once they leave the nest and begin new relationships.

“Your son, he's about to go to college, and maybe he's going to get into certain relationships,” Matthews tells Jenny. “So I think you have an opportunity to start being more transparent as to how you started getting financially swayed into decisions that you might not have wanted to.”

Don’t use ‘remorseful language’ when discussing your financial decisions

Talking to your kids about finances may involve delving into some of your own money mishaps, which can be tough to articulate for a lot of parents. But Matthews says it’s important not to use “remorseful language” when discussing any mistakes you might have made in your financial history.

“There's something to say about ownership, right? And so you made that decision before to do the house, to take on the credit cards. And you really do have to honor and respect where you were at that point. But you also get to honor and respect where you are now and how disjointed those two things might very well be,” Matthews says.

“Just really telling your kids that, ‘Hey, I made these decisions, maybe it wasn't the best at the time, but I'm really looking forward to working on making better decisions.’ So always phrase it in a better, a more aspirational way.”

(Photo: Courtesy Angela Matthews)
Financial coordinator Angela Matthews says having honest conversations about money and helping teens figure out their “financial values” can set kids up for a good financial future. (Photo: Courtesy Angela Matthews)

Empower your kids to make money ‘on their own terms’

Matthews says parents can encourage their kids to utilize “their God-given talents” to make money and understand the concept of running a business in a way that’s also enjoyable.

“Start thinking about entrepreneurship and really empowering them to start making money on their own terms,” Matthews says. “What would it look like if they had a hobby and they decided to sell something at the market? What would it look like if they got paid to tutor a classmate or someone that was younger?”

Open a 529 savings plan and start investing

For parents with young children, Matthews says a 529 plan is a great way to start saving for college.

“It's perfect. It's a savings plan, but it's also turbocharged with the markets,” Matthews says.

And rather than having money sit in a savings account, Matthews says parents should “start putting your money to work for you” by investing. She acknowledges that the idea of investing can be scary for a lot of people, but that the impression many people have of it being only for businessmen in suits on a Manhattan trading floor are outdated; these days, anyone can be an investor, and in 25 years as little as $25 a month could grow to $23,000.

“Think to yourself, ‘Hey, I'm an investor going forward,’” Matthews says. “Even though you don't invest in anything, you invest in your relationships; you're investing in your boys; you're investing in yourself by going to work and working so hard. So you already are an investor. How do we take that and translate it to other things outside of us so that those things can start growing, too? Just as much as you've grown through your life experiences, all we're doing is thinking about how can we let our money grow through its own experience.”

(Photo: Courtesy Jenny D.)
Jenny has learned to feel gratitude for what she has, and that financial problems "are nothing to be afraid or ashamed about." (Photo: Courtesy Jenny D.)

While it’s been a bumpy road, Jenny says changing her mindset around money and allowing herself to feel gratitude has helped her grow from an otherwise challenging period in her life.

“I've learned that financial issues and problems are nothing to be afraid or ashamed about,” she says.

It’s an attitude shift that Matthews believes can help Jenny — and others — reach their financial goals.

“Money has a lot of emotions, but money's a thing that really drives us as well,” Matthews says. “So if you focus on the abundance rather than the lack, you focus on your goals and where you want to go, you'll get there in no time. You're just going to attract and do the things that you need to do to make it happen.”

Video produced by Olivia Schneider


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