Podcast Summary: Jill on Money – “Next Financial Steps After Divorce”

Host: Jill Schlesinger, CFP® with co-host Mark
Guest: Kate from Massachusetts
Release Date: November 5, 2025

Overview:

This episode focuses on financial planning and steps for rebuilding stability after divorce. Jill and Mark field a listener call from Kate, 50, who is navigating post-divorce life, a demanding job, dependent family members, and critical decisions about assets, cash flow, and her adolescent daughter’s future. The discussion serves as a practical playbook for anyone facing major life upheavals and financial resets.

Key Discussion Points & Insights

1. The Impact and Realities of Divorce on Finances

• Divorce is described as a “real financial upheaval.” Both hosts stress that nearly everyone comes out of the process poorer, with significant change to cash flow and assets.
  • Quote [04:36]: Mark: “It is a real financial upheaval to get divorced as you have found, and I understand that. So let’s talk a little bit about how we’re going to rebuild.”

2. Kate’s Financial Profile

Salary & Income:

• Base Salary: $295K
• Bonuses: Up to 140% of base; last taxable income was about $460K due to RSU vests and an IRA withdrawal. Current expectation: $400K annually.
• Additional Income: $3,500/mo from child support and mother’s housing contribution.

Assets & Debts:

• House: $1,089,000 (assessed), $800K mortgage at 6.75%, in Kate’s name.
• Car Loan: $8K balance at 4.25%.
• 529 Plan for daughter: $15K, set up by godmother.
• Retirement: $306K in IRA (after transferring $25K to ex-husband in divorce), $9K in restarted 401(k).
• Unvested RSUs: $500K scheduled through 2029; about $140K vesting in early 2026, but some must go to ex-husband.
• Cash Savings: $30K in high-yield savings account.

Responsibilities:

• One daughter (13).
• Supporting mother (81), who contributed to covering the mortgage during the divorce; an official arrangement is in place to reimburse siblings upon house sale.

3. Immediate Post-Divorce Priorities

a. Building Liquidity

• Jill stresses the importance of increasing accessible cash before focusing on aggressive long-term savings or mortgage paydown.
  • Quote [15:13]: “The rebuilding after a divorce, to me, has three components. One is to just beef up your accessible cash...”

b. Strategic Use of Upcoming Windfalls

• Kate’s RSUs and annual bonus (projected net of $160K after ex-husband’s share and taxes) are earmarked for:
  • Increasing cash savings to $90K (suggested: put $60K of windfall here).
  • Modest college funding: $10K to 529 plan.
  • Optionally paying off the remaining $8K car loan “if it annoys you,” for peace of mind.
  • Gradually increasing 401(k) contributions from 6% to at least 8%, with further increases if cashflow allows.
  • Not paying down the 6.75% mortgage principal aggressively for now; aim for flexibility and liquidity instead.
  • Quote [15:09]: “I don’t really want you to put anything more towards the principal ... I want to build more.”

c. Education Funding Philosophy

• Kate feels some responsibility for her daughter's college expenses but does not intend to cover everything, and expects her ex-husband to contribute as well.
  • Quote [14:18]: “I want to contribute to her school, and I expect my ex husband will do some as well. But I also don’t feel obligated to fully pay for her college.”

4. Managing Family and Housing Complexity

• House decision is deferred until after daughter’s high school graduation (2030), and possibly longer for mother’s well-being.
• When sold, $460K will be repaid to mother (or split among siblings if mother has passed).
• Mother (81) is in good health but has mobility issues. Future housing plans flexible based on her condition.

5. Expense and Savings Discipline

• Kate reports after-divorce spending is higher than she’d like—nearly $15K/month.
• Jill and Mark encourage a “party’s over” attitude and careful tracking, but acknowledge transitions can be expensive.
  • Quote [17:09]: Mark: “You know, this is what happens when you go through divorce. Can’t say no. Got it. Can’t. The kid’s got to be taken care of, you got to be taken.”

6. Long-Term Planning

• Once cash reserves are built, focus should shift to maxing out 401(k) contributions, including catch-up (up to $31K/year).
• Annually review how to allocate future RSU vests: prioritize liquidity first, then adjust based on evolving life needs (e.g., refinancing, changing homes, potential elder care).

7. Legal & Estate Planning

• Kate has already updated estate documents to reflect her changed life status—a key recommendation.
  • Quote [20:34]: Kate: “It was a great investment. So all of that is settled.”

Notable Quotes & Memorable Moments

• On divorce impact:
  • Mark [04:36]: “It is a real financial upheaval to get divorced as you have found, and I understand that.”
• On RSU windfalls:
  • Jill [12:56]: “Let’s assume 90... Now that’s not including my bonus. I get my bonus too at the end of February.”
• On post-divorce spending:
  • Mark [17:09]: “You know, this is what happens when you go through divorce... Now we’re going to buckle down...”
• On prioritizing liquidity:
  • Jill [15:13]: “Liquidity first. So we got to make sure you bump up that retirement account eventually.”
• On home as an evolving commitment:
  • Jill [18:30]: “I think it is entirely possible that that house is not the house you stay in for the next 30 years.”

Timestamps for Key Segments

• [03:49] – Kate introduces herself and outlines her situation post-divorce.
• [05:03] – Discussion of income, bonuses, and RSUs.
• [06:10] – House value and mortgage details.
• [07:14] – Retirement account status after the split.
• [08:30] – Current cash savings and RSU vesting schedule.
• [09:12] – Family dynamics: supporting daughter and mother; monthly supplemental income.
• [11:08] – Cash flow realities and post-divorce budget strain.
• [12:21] – Planning for the upcoming RSU/bonus windfall.
• [14:18] – College savings intentions and boundaries.
• [15:09] – The case against accelerating mortgage payments right now.
• [19:41] – Sharing house proceeds with mother and siblings; legal documentation and agreements.
• [20:34] – Estate documents updated post-divorce.

Tone and Language

Jill and Mark maintain a supportive yet practical tone, mixing humor with direct advice. The conversation is candid about the emotional and financial challenges of divorce but is always empowering and focused on actionable steps.

Actionable Takeaways for Listeners

• Rebuild cash reserves after a major life event before ramping up long-term savings or debt payments.
• Don’t rush to pay down mortgages at the expense of liquidity—flexibility is crucial in transition years.
• Incrementally boost 401(k) contributions in line with improving cash flow.
• Plan RSU and bonus windfalls in advance to further goals in both savings and debt management.
• Set clear boundaries and expectations for education funding.
• Document family financial agreements and ensure estate plans are updated after divorce.
• Expect transition years to be expensive; acknowledge but gradually rein in spending.
• Regularly review and adjust financial plans as new life chapters unfold.

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