Untying the Knots | Episode 9 | Creating Financial Safety

Dawn Smith and Kristen Files, partners at Atlanta-based family law firm Smith & Files, host “Untying the Knots.” Season 1 offers practical advice and resources to families navigating crisis and covers such themes as co-parenting, intimate partner violence, myths about marriage and divorce, support systems, and financial safety after divorce. The 10-episode series launched July 1 with new episodes weekly through September 2 and includes special guests Chief Judge Christopher Brasher, Chief Assistant District Attorney Jennifer Stolarski, and Historian and Marriage Expert Stephanie Coontz.

Below is a transcript of Episode 9 | Creating Financial Safety.

“Untying the Knots” is available on all streaming platforms, including Spotify and Apple Podcasts. To learn more, visit www.smithfileslaw.com/podcast.

DS: Dawn Smith | KF: Kristen Files | MR: Michael Robinson, Financial Planner, Capstone Financial

DS I’m Dawn Smith.
KF And I’m Kristen Files.
DS This is Untying the Knots, a podcast about family crisis…
KF … and what it takes to survive the tangles and strengthen the ties.
KF Welcome to Untying the Knots. Today we are talking about financial safety and all the stuff that we need to know about our finances so that we can plan for the future and be safe. We’re really excited to have an expert on the show, Mr. Michael Robinson, who’s a financial planner to give us some tips and talk to our listeners about best practices for your finances.
DS And as hard as people fight about their kids and custody, they fight equally hard about money. The untangling of particularly long-term relationships — sometimes the bulk of the argument can be about money. And one of the reasons I think it’s so important to talk about it, in that reality, is that people can then end up spending the bulk of their marital estate fighting with each other about their marital estate. And we don’t want our listeners to find themselves in that situation. So, Kristen, financial safety is an episode I wanted to do but also didn’t want to do because I know part of what we do in Untying the Knots is tell our stories. And I have had what I’ve come to know of as a pretty common psychological relationship with money, which is one where I feel frequently inadequate, mostly ashamed, and only in my later years, have I started to try to rid myself of some of that shame-based thinking around money and taking a more realistic approach. I was horrible with money for many, many, many years, but particularly in my early 20s, starting when I went to college and — I don’t know about you, because I’m older than you but — when I went to college, the main thing that came in the mail to me, were credit cards. And so I got all these credit cards in the mail, and I used them all, so that when I found myself, you know, at 25, 26 years old after law school, I was in a real financial hole. So in addition to having law school debt, I owed a tremendous amount of money on credit cards. But right after law school, I also went to a place called the Consumer Credit Counseling Service, who would work with people on their finances. And they set me up on a budget and they consolidated all my credit card debt, and I made payment to them for years till I could wipe that out. So I’ve always been really ashamed of that. You know, here I am with all these degrees and I’m supposed to be so accomplished, and I can’t even manage to pay my own bills. And then, so then flash-forward, you know, and it’s a decade later, and I’m getting a divorce. As part of the divorce, you know, I always say, I ended up buying my house twice. Right? Because I bought it once with my husband and then I stayed in it and bought it again from my husband. And then I was so financially worried that I ended up using the small 401k account that I had at the time to float me through. So I made withdrawals in my 30s from a 401k, where I paid a 10% penalty and paid taxes on it. Something that I wish I could claw back now. So I know the shame of money and, you know, our clients come to us and they’re not doing anything I didn’t do.
KF Absolutely, but there can also be shame within the marriage about money, where partners aren’t sharing with one another what’s going on with the finances. And that causes a whole different set of issues, you know?
DS Right. And while, up to this point, we’ve talked a lot about as part of a divorce or breaking up, that courts and you, as parties, have to figure out child custody, some of the other really big areas that a court has to make decisions about relate to money, relate to child support and what we’ve known as alimony, or is frequently called spousal support. And I’ll talk a little bit about alimony and you can tell folks about child support. In our state and, I will tell you, most states, gone are the days where there was such a thing as lifetime alimony. You know, courts really look at alimony as rehabilitative in nature, so reserved for the non-income earning spouse to get back up on his or her feet, to be able to financially support themselves going forward. Most courts and most jurisdictions aren’t going to tell you exactly how many years they’re going to give alimony, but I think everybody should count on it being short-term and count on it never being quite enough. You know, alimony is based on need. And that doesn’t mean, “Well, I’m going to spend $10,000, a year on extracurriculars.” Right? What are reasonable needs? How much do you need an ability to pay?” So a court’s also not going to make the wage-earner spouse plant a money tree. There is no squeezing blood out of a turnip, so they’re not going to make a wage-earning spouse go into the red to pay alimony. And I think those are some really hard things for people who’ve worked in the home and not worked out of the home to hear. Because what it means is that we find, more often than not, women with higher rates of poverty post-divorce, there’s simply not enough money to go around.
KF To your point, it’s such a big transition. I don’t think it can be overstated how, when you’re unraveling a family that has lived together as one, for whatever period of time, and you’re separating it into two, then the finances are going to look different. It may mean that previously you were able to spend X amount of dollars on the children’s extracurriculars or travel or whatever the things may be. And now there just may not exist that amount of money to do that in two separate households that are now having to be maintained. And I think that’s definitely an emotional aspect that takes some time to transition into. Another thing that people will be looking at when they get ready to be separated is “How much support will I have from my partner to take care of the children? especially if the children are living primarily with me?” You know, so if I’m the person that is primarily having the children, “How much child support will I get from my ex to help take care of them?” So every state is going to have their own model or formula for how to calculate the amount of support that one parent pays to the other parent. In Georgia, it’s an income-based model, where the expenses for the child are proportioned to each parent, depending on their income. And what I can say is that I’ve had parents that say, “This isn’t enough.”
DS Right. The legislature came up with — because it’s a chart they came up with, it said, “For two kids at this income level, this is what it costs to raise them” — and it is never tied to reality.
KF And that’s hard because even as practitioners, we have to use what’s available to us as the tool to determine the child support and negotiate it.
DS I want to talk briefly about what are things that people can do to protect themselves before they get married. I’ll give a piece of practical advice that my mother gave me.
KF Mm-hmm.
DS So, Kristen, I think I’ve told you this before, but there are a couple things my mom has always told me about women and money. She says, and she says it frequently, “A man is not a financial plan.” And I think she taught me that growing up about “Have your own money, take care of yourself.” The other thing she says that I’ve very much believe is true, and I think we see this in our practice frequently, is that “A woman with her own money is very hard to control.” Now, this comes from a woman who’s divorced twice and probably bought a couple houses twice. Right? But I have found it really important, and I think a woman should always have their own money and should have some financial literacy. I have girlfriends who have been married — one, my best friend! — been married for over 30 years, and they each keep a little account. They’ve got their joint account, but they’ve had a little account where they don’t need to be answering to each other. And I think that’s really important, one, for your own well-being but also to build credit, so you can learn the skills related to it. And the other thing I would say, sort of related to that, is always title the property in both names.
KF Yes. Yes.
DS Title as many things as you can in both names. If it’s something that you receive from inheritance and you want to keep it out of the marital pot, keep it separate. But I can’t tell you how important it is to title that property, that real property, in both names. It secures your ability to split that, should you split up in the future.
KF Right. And on that same note, it’s okay for people to make different decisions within their relationship on who will handle finances and who will do things. But I do think it’s important — and I say this most often to women — to at least have a working understanding of what the household finances look like. Do you have passwords to the online accounts? Everything is online now. Do you have access to where you would find the deed to your home? Or, if the home has been appraised, do you know what the value is? Do you know what all the accounts are that even exist? Like, do you have joint accounts? Are they separate? Does your partner have multiple separate ones? Do you have a retirement account? Does your partner have a retirement account?
DS Absolutely. So, Kristen, what happens if you’re trying to get access to some of that financial information and those passwords and your partner’s not letting you do that?
KF Right. For example, I’ve had clients where I’ve said, you know, “Can you get the password to this? Can you go into his office or her office to get the documents?” And if the answer to that question would be met with hostility or resistance in some way, I think that could be a serious warning sign for the power dynamic within the relationship. Even if one person is taking control over one or more aspects because you all have agreed, if you decide that you no longer agree with the way that’s set up, and now you say, “Look, you know, I actually would like to see what’s in that safety deposit box. I actually would like to be able to log into the account and see why we’re spending so much on these loans each month, etc.” And if you’re getting resistance from your partner and not being able to do that, that’s really concerning.
DS Yeah, I agree. I agree. So it’s a red flag. And red flags don’t mean you have to split up. But it does mean you need to look at it harder and maybe seek some professional third-party intervention. And if you don’t feel comfortable having that conversation — because it is a possible sign of an unbalanced power dynamic that could hurt you in the present or in the long-term.
KF In my experience, something I know to be true is that you cannot give what you don’t have to give. So I want to talk a bit about what generational wealth is. And generational wealth represents the idea that there are assets available in your family, such as businesses or money, resources — anything else that has monetary value that can be passed down generation over generation. Not only money but also the education around money. So those families are going to have less generational wealth available to them, because either they are people of color or they’re poor, or they’re women, or immigrants. They’re just in survival mode. What I mean by survival mode is that those families are literally just trying to get their bills paid, day by day, week by week. It doesn’t allow time or resources for them to talk to their kids about how to save, how to plan. They’re just trying to survive. Like me and my mom talk a lot about finances now, and she’s so sweet and funny, and she’s always like, “I learned so much from you about finances.” You know? If she had the information to give to me, she would, but she doesn’t. And I think she acknowledges that. And I acknowledge that and it’s not a judgement. It’s just like — I am the first generation in my family who frankly has the miscellaneous resources to even, like, go talk to a financial planner or go pay for a therapist. When you’re in the minority, you’re going to be behind. I have had to empower myself to say, “You know what, I need help. I don’t know where I’m supposed to go to invest money. I don’t know why it’s a bad idea to take money out of my retirement. There’s not anyone I can go to in my immediate circle who can answer those questions, and that’s okay.” And then I also end up then being a resource to people in my circle. And, you know, that’s just a part of the process.
DS Yeah, that’s a great explanation and sharing of your personal situation that is so instructive. And I’m embarrassed to say that my first in-depth introduction to the whole idea of generational wealth and how that differs was when Stacey Abrams ran for governor. And she was debt-shamed because she had incurred a great deal of debt. Right? Remember? I have a friend who grew up in really low-income Atlanta and ended up getting a PhD. And her work in her 30s — she will talk very openly about it — has been about getting out of the poverty mindset. Right? So, despite her having all this education, she was still living back in scarcity in her mind and dealing with her money in a scarcity mindset. So, Kristen, I’m excited that we can take it out of our amateur hands and talk to an expert that we’ve asked to come on here today, who is a financial planner and works with folks like us. So we’re really excited to hear from Michael.
KF Thank you so much for joining us today, Michael! I am excited to hear what you have to say. And could you please introduce yourself to our listeners?
MR Sure. Hi. My name is Michael Robinson. I’m with Capstone Financial. We’re located in Buckhead, Atlanta. I’m a financial planner. So I focus on holistic financial planning. So I don’t just focus on “Is your 401k this, is your stock account that?” I focus on every aspect about your life. I want to make sure it’s taken care of and covered. I’ve been in an industry for 20-plus years. I’ve worked in different capacities. So the person that I’ve been for the past 20 years has been a kind of a financial planner helping people out. Initially, I worked for another financial planning firm, and it was financial planning but not necessarily holistic financial planning, but it was financial planning in its purest form. And, essentially, we’d worked with very wealthy people. You had to have at least $500,000 to walk in the door to even talk to us. And so our average client was like $1.5 million. And so what I had noticed was, “Hey, there are people who were making $100,000 a year or have $100,000 In the bank that actually need my services as well. So why can’t we do this for everybody else?” And it was just one of those things where it wasn’t profitable for the firm to, kind of, work with people who have a lesser, you know, dollar amount. I want to focus on helping other people to get to that status where they can’t walk into somebody’s door and says, “Hey, I have $500,000, here, invest my money for me.”
DS That’s great, because we’re gonna give you an even broader audience now, because, we’ll imagine, there are people that are listening today that are in that larger amount where you were previously. There are going to be people that are in that hundred-thousand-dollar range. But we’re also aware that our listeners are people that never would think they need a financial planner and may make even less. So we’re happy you’re with us to give us some tips. And I wanted to ask a real basic question: What is financial planning? I don’t know that everybody knows that.
MR Financial planning essentially is taking the sum total of everything that you have, taking account for every that you earn, and deciding, “Okay, this is what I want my future to look like.” Life does not work out perfectly, but if you have a plan that you can adjust — you know make adjustments to as you go along — you’re going to end up being a lot better off than if you’re just kind of winging it.
DS Most of my life — many years and decades in my life where I was embarrassed to even think about going to someone like you, because I felt like I was barely managing to make do as it was, even though maybe I had an increasingly significant salary, but I just couldn’t seem to do things right with money. And I have since learned that there are a lot of really shame-based emotions around money. Do you encounter people feeling that way about coming to see you?
MR Yeah, all the time. Because what happens is, you know, when I mention, you know, to a person, “Hey, I’m a financial planner, this is what I do.” And they go, “I don’t have enough money to come see you.” And I’m like, “If you have $1 In your savings account, you have enough money to come see me because we want to increase that $1 to $2.” You know, so that’s kind of whole idea is — people think that you have to be mega-wealthy, because the industry is kind of set it up that way, that you have to be rich to go see a financial planner. And that’s not the case. Again, you know, what — your needs may be different, you know, depending on the amount of money that you have, but essentially everyone has the same need, [which] is that they want to retire one day, and they want to send their kids to college, and have some money to leave to their kids. So that’s what I do.
KF And I want to get a better understanding of what it means when you say “holistic financial planning.”
MR Well, I call it 360 financial planning. So it’s one of the things where I would say, “Hey, you know, I’m a single person, and I have no kids, but I want to have kids.” All right, well, we need to make a plan for that. “I want to get married in X amount of years.” Okay, we need to make a plan for that. “Hey, I need to buy a car. Should I lease a car should I buy a car?” Well, it depends on your work situation depends on how you’re employed. There may be a separate plan for that. “I have elderly parents and I may end up having to take care of them one day–” there’s a plan for that. So that’s why I say I call it 360 financial planning, because, holistically, we’re covering every aspect about your life that you may encounter as you go along. And so we’re just putting a little tiny plan in place for that.
DS Now, a lot of the people that we talk to — our clients and people that we may just consult with — are people that consider themselves very financially unsophisticated. And maybe they have not had their fingers in the financial pot in the household at all. And now they’re finding themselves going to be running a household on their own and needing to have their fingers in that financial pot. What do you think’s important for them to know as they’re beginning this journey of splitting up and planning their financial life post-divorce?
MR Generally, what I’ve come across is, you know, husband makes all the money, handles all the finances, he brings on the check, and tells the wife, “Okay, these are the bills I want you to pay.” Wife doesn’t really know what’s going on. She’s just paying the bills because you know, husband says, “Pay these certain bills.” She considers herself, you know, less sophisticated. However, she’s actually the COO of the household because she’s running all the finances. Right? She’s very sophisticated. She just doesn’t realize that she is. I always say you got to have a team of people around you of trusted advisors. It’s very important. You have to be a lawyer, you have to have a good banker, you have to have a good financial advisor, you have to have a good insurance person. You even have to have a good plumber! You know, so you know, you have got to have people that’s going to take care of you when those needs arise.
DS So, Michael, earlier in the show, Kristen and I were talking and I told a story about when I got divorced so many years ago, finding myself in a financial situation where I thought that the only way I could get out of it was to start cashing in my 401k. And so I made some significant withdrawals. Because this was my own best thinking. Right? And I was in crisis mode. And you know what happened to me — it was a 10% penalty, and then I had to pay taxes on it. So what would you advise to a dodo-head like me who was doing the best she could at the time?
MR So with money, we go through the path of least resistance. And if we realize that, “Hey, I have X amount of dollars in my 401k, I can take it out, and I can get it back in there.” It’s very rarely where it works out where you can get it back in there. And, as an advisor, that would be the last place I would say go to get money. And then you’re paying taxes on top of it. So you’ve actually made money during the year, so you’re essentially moving yourself up into another tax bracket. So you’re therefore paying more taxes and paying penalties on top of it. Also, you’re harming your retirement because that money that you’ve taken out — when it comes to investing, it’s not about how much money that you’re putting into the market, it is more important to have the time in the market and the longer you’re in the likelihood you’re going to make more money. It’s very rare that you put $1 into the market and it turns into $3, you know, next week. It is very possible to put $1 in the market two years ago, and now it’s worth $4.
DS So that’s the last place to look. Where are some other places you would advise folks to look?
MR It goes back to budgeting. If you’re employed, and then you go, you know, “Hey, you may need to make some adjustments on your, you know, your withholdings” and kind of get extra money in your paycheck temporarily to kind of get you through the month. Borrow from family members and friends, and you can do a promissory note and say, “Hey, I promise to pay you back in two years, you know, X amount of dollars that you’ve loaned me.” That’s a much better scenario than having to pay Uncle Sam an extra 10% of your money.
KF You know, sometimes when people think, “Oh, I have these credit cards, or I have this debt,” and you may be saving on the side, and then you’re trying to figure out, is it more prudent or is a better decision to take this cash money that have and pay off all this debt? Or is it better to hold on and invest that money in some way? Like what would your advice be to someone in that situation? We often have clients who are just trying to figure out what to do with their money and they’re leaving their marriage with debt.
MR What we generally say is if you have debt, you need to line it up and go, “Okay, this is a debt that I have, and these are the things that I want to pay off.” And we one-hundred percent agree that you take, you know, on approach either you, psychologically, you go, “Okay, I want to pay off the biggest thing first, or I want to pay off the smallest thing first.” It’s up to you. But we always recommend — I always recommend that you pay off the smallest thing because it’s that small step of paying off one thing, it makes you feel, you know, happy that, “Hey, you know, I paid off that Macy’s card.” So then you can kind of redeploy that money that you’re paying towards Macy’s, and now you’re paying off a Visa card.
KF Right.
MR You know, I come from a family who did — my dad’s, you know, from another country so I was never taught about money because he didn’t know about money because he didn’t have money. You know? So he came to United States, joined the army, blah, blah, blah, and here we are now. I mean, I even find myself at my 88-year-old father telling him, “Hey, Dad, uh, you should be doing a little bit different with your money.” You know? Again, it goes just back to your view of money. There’s nothing wrong with credit, there is something wrong with where you’re spending so much than what you’re paying in interest is more than what you’re able to save every month. And so that’s kind of where the problem comes in. There are good and bad debt. You know, houses, cars to a certain extent. But now if you’re, you know, going out to the bar and treating your friends every night, then I would advise against that.
KF So, Michael, earlier in the episode, I talked about generational wealth and what that has meant for me personally and my family. As a financial planner, what has been your experience with generational wealth?
MR In certain cultures, it goes back to, again, how money is treated in the household. There are certain communities where, you know, assets are pooled. It seems to be more, you know, like a groupthink type of situation. And there are certain cultures where, you know, it’s kind of, “It’s all for me, you know, this is my money. I don’t want anybody to know what I have.” You know, that kind of thing. Kind of that divergence between your culture and how you were taught.
DS Exactly, which is a good reason — that’s a great point about why we need to teach our kids about financial literacy. I mean, it’s not “illiteracy,” that’s just coming from a different mindset and culture but teaching kids. Are you teaching your kids about financial literacy?
MR Yeah, it’s a little harder. Because when it comes to me, it’s like, “Ah, here comes a dad talking about saving 50 cents out of every dollar. Here’s this guy.” You know? And my kids — you know, I have three daughters and they’re all a little different when it comes to money. You know, my oldest daughter, she’s 20. And she now views money differently because she’s working. So she’s no longer swiping dad’s credit card, you know, to go buy everything. So she looks at money just a little differently. My middle daughter, she’s a cheapskate. She doesn’t wanna spend money on anything. She’s happy to take hand-me-down clothes from the older one because, “Hey, I don’t have to spend my allowance. I’ll just wear her clothes.” Now, my youngest is — she’s more like me. You know, she likes the latest tennis shoes and she likes the, you know, all the coolest clothes, that kind of thing. But with her, I tell her, “Hey, shop around, instead of paying $50 for a pair of shoes somewhere else, they’re selling them for 45 and even at $5 that you save and can really amount to something down the road.” So, with my kids, what I do is I give them you know, for special events and birthdays, I give them money. I don’t buy him gifts. I will buy them gifts every now and then. But I give them money and I go, “Okay, I’m giving you –“  you know, just for an example — “I’m giving you $10. You have the option of — you can spend all $10. Whatever you save, I will match that for you, then you’ll have more than if you would have spent it all.” So like I said, my middle daughter, if I give her $10, she will save $10 and go through the couches and try to find change and say “Hey, I got $10.50 cents, will you give me $10 and 50 cents?”
DS That’s a good tip for listeners, with their kids.
MR So it teaches about saving early and teaches them about, really, the 401k process of, “Hey somebody’s giving me money, and if I save some of it, they’re gonna match what I save.”
DS So to wrap up, Michael, acknowledging again that we’re doing this during the pandemic, are there any pieces of advice that you would give, particularly to all of us, as we weather what is both the health and economic crisis that we’re experiencing during the pandemic?
MR The world going forward for everyone is going to look a lot different than it did back in January. And my advice to everyone is, even if you don’t think you need to talk to a financial planner, reach out and just kind of bounce some ideas off of one. Most financial planners — we’re what we call “frustrated educators.” So we’re willing to talk to you to a certain point. You know, because it’s one of the things — “Okay, I’m going to give you the ingredients for the cake, but I’m not going to give you my secret sauce or my cake.” So, “I can give you the general,” but after that, then there’s like, “Okay, now you need to take on an engagement with me of some sort, and let me earn from my knowledge and my experience throughout the years.” If you have a trusted advisor, such as a lawyer or a banker, you know, ask them do they know someone. But just kind of see what your situation is currently and see what it could look like going forward. And that would take a lot of the, kind of, worry about the future away,
DS Michael, I’m so pleased to have met you and to find out about you as a resource and for you to educate us and our listeners. And I hope you’ll allow us to tap you again, if we need to bring you back on to talk about financial issues with our clients. Thank you so much.
MR Oh, thank you for having me on. You know, because I’m the introvert that loves to talk, so…
KF We definitely appreciate it! And just to reiterate what Dawn said, it’s been awesome talking to you today. Thank you so much!
DS Kristen, what a catch! I’m so glad you found out about Michael Robinson, about his services. He gave some great information for me and the listeners.
KF Yeah, I thought so too. He’s really personable and knowledgeable. So that’s good. I think, like you were saying earlier, it can be so intimidating, thinking about bearing all of your finances to a stranger. There’s all this shame and guilt associated with it. So, I think he totally gets that. And, you know, I just want people to feel encouraged to say, “I can talk to someone about this. I need to have a plan.” And he was excellent for that, I thought.
DS Yeah, yeah. I really enjoyed it. And we’ll keep coming back to folks like him to ask questions about finances, and living on your own, and best practices.
KF Definitely. So thank you all for listening today. We look forward to our next episode of Untying the Knot!
KF If you or someone you know is in the process of taking control of their financial safety, Savvy Ladies is a nonprofit organization that helps women find financial independence. You can visit their website at savvyladies.org. They offer free financial help line, blog posts, and free webinars. The Institute for Divorce Financial Analysts provides specialized training and resources for pre-divorce financial planning. For more information, go to institutedfa.com. To learn more about the services that Capstone Financial offers, you can visit their website at capstonefinancialga.com.
KF If you would like to know more about the topic we discussed today, you can find show notes and resources on our website, which will be linked in the episode description.
DS Untying the Knots is a production made in partnership with FRQNCY Media. I’m your host, Dawn Smith.
KF And I’m Kristen Files. Enna Garkusha is our producer.
DS Episode research is by Jessica Olivier, Becca Godwin, and Vincent Mitchell.
KF We are recording in Atlanta, Georgia, during the pandemic.
DS We want to thank all the central workers and those who are doing their best to keep us healthy and safe.