Thank you for listening! Find a transcript of this episode below.

 

Credit in the United States is a very important concept, because it affects a lot of things in your day-to-day life, and oftentimes you may not realize it. Let's just start with a simple example of why credit's important. If you're trying to get a new home after divorce ... I know some people who are trying to get a new mortgage or are trying to rent a home after divorce ... well, one of the first things that anyone is going to do, unless you have all the cash upfront, and most people don't, one of the first things people are going to do is they're going to ask you for your credit score, and they're going to ask you how your credit profile looks, to see if they're willing to extend that mortgage to you or if they're willing to rent you that home or rent you that apartment. They're going to check your credit to do that.

 

Another situation is if you need a credit card. A credit card can be very useful. Even if you have the money to pay for things, a credit card can be helpful for your daily spending, and you pay it off each month. Or if you need to get a car loan. These are all things that depend upon your credit, and every person, if you have credit, is assigned a credit score, and they have a credit history that these different financial institutions or lenders will be looking at. But when it comes to the divorce situation, many of you might be in a position where you have very limited or no credit history, which creates a challenge.

 

The weirdest part about credit in this country is that it's a chicken and the egg problem, is that you need good credit to qualify for a lot of things like a home loan or qualify for a good credit card or qualify for rent, but to qualify for those things you have to build up your credit and your credit history and credit report. I know some of you, if you did everything in your spouse's name, might not have that detailed credit history, might not have had a credit card in your name, might not have had an auto loan, might not have had many of those things that, unfortunately, in this country are very important for your credit. And so when you're in the divorce situation, it is now your time to start setting up these important accounts, and that also even extends to setting up your own bank account. While it's not specifically a credit thing, it's just as essential and closely connected to these items.

 

And so in this episode I want to discuss a few ways that you can build your credit, and we're just going to start with some concrete action items. It takes time to build up your credit. I mean, it can take ... There are some steps you can be taking today regardless of where you are, but some of these items will take months and years to generate a satisfactory credit history. But when I think about all things in the long term, you're going to have to start doing it at some point, so why not start now?

 

One of the first things that you should do, outside of ... The first thing you should do clearly is to get your credit report. There are credit bureaus. You get a free credit report from them. It's becoming very common. Or you can go to websites like Credit Karma, but get your free credit report to see what accounts you may have, or if you have none, it'll tell you that as well. But that's a good starting point to figure out what your credit score is, what your financial picture looks like, at least from a credit perspective, and to start building your credit and improving your credit going forward.

 

One of the things that's kind of most frustrating about the credit system is that in order to have credit you have to take out loans. That's not the best thing in the world, but in order to build up your credit, that's basically what you need in some forms. Now, the debt can be short-term, might be just a month or so, and you might pay it off every month, but that's basically what's required for you to build your credit. So one of the first things, after you get your credit report ... I'm going to approach this from a perspective that you have no credit history at all, and I do have some clients that I work with on a regular basis that, even though they have assets and money, they don't necessarily have a detailed credit history.

 

And so we're going to pretend like you have none. If you already have a limited credit history or a great credit history, great. You can skip this episode or listen to some of the other specific things. But I'm going to assume you don't have anything for the purpose of this episode, and I'm going to try and help you get on your feet. And so one of the first things you can do to start building your credit, outside of getting your credit report, one thing you do is you get a secured credit card or a credit card at all. Now, most of the time, if you don't have a credit history, you're not going to be able to get the American Express Platinum Card or the Chase Sapphire Preferred Card, which are some of the better credit cards on the market today, depending upon what your needs are.

 

You might not be able to get that immediately, but you can get something called a secured credit card. Basically, it means you give them some cash upfront, and they hold that cash onto you, and they give you a credit line equal to the amount of cash. So basically, if you were to give them $1,000, you pay them, basically, $1,000, and they say, "All right, well, here's your great credit card. You can spend up to $1,000." Now, you're supposed to pay it off with other funds, but you can spend $1,000, and if for whatever reason you don't pay it off, they're just going to take that $1,000 from you and go from there.

 

Now, the thing about a secured credit card is, it's a great starting point for building your credit. Now, it's not a traditional credit card. A traditional credit card, you don't pay upfront. You don't give them money upfront and then pay them back later, but a secured card is nice, because it reports that you have credit. It's a good way to say that, "Hey, yeah, I've been making payments. I have this credit line outstanding, and I'm starting to build trust." So if you've never had a credit card before, you can look for a secured credit card.

 

Another thing you can try is look for store credit cards. So if you like shopping at an Amazon or a J.C. Penney or a Walmart or whatever else, they all have their own versions of credit cards. You might want to check those places and apply in there. They oftentimes have less stringent credit requirements. And then also, you can do a Google search for credit cards for people with limited or no credit history, and I guarantee you some credit cards will pop up.

 

Now, the downside to these types of credit cards is that, although they build your credit, they tend to have very, very high interest rates, in excess of 20%, meaning if you were to spend, using my example before, $1,000 and not pay off your credit card at the end of the month, they are going to charge you over the span of a year, they could charge you $250 in interest. That's 25%. So you have to be very careful with these secured credit cards and some of these credit cards if you have limited credit history, because they can be very expensive if you do not manage them wisely.

 

The next thing you can do is you can think about becoming an authorized user on a credit card. So if you have someone who you trust, maybe a sibling, that would allow you to be an authorized user on a credit card or something like that, or a cosigner with you ... Authorized user and cosigner are two very different terms. Authorized user just means that you get to use someone else's credit for a credit card, but the person whose primary name is on the account is the person who is responsible for that card. A cosigner is a little bit different, in the sense that both people are equally liable for what happens on that card or on that loan. But in any case, you can try and become an authorized user on a card, or better yet, become a cosigner. Both require the person who is providing their name to really trust you, but it is a good way to start building your credit history, and you can get joint credit cards in those names to start building your credit.

 

Maybe you can try an auto loan. Another way to build credit is if you need a new car ... "new" doesn't mean necessarily the latest edition car, but if you need a different vehicle, you can try getting an auto loan. An auto loan, while it might not be the top tier auto loan, might be more expensive than traditional auto loans, if you're paying your auto loan on time ... Maybe you have to pay a bigger deposit upfront, which might happen, but they may allow you to get a loan, and as long as you keep paying that loan on time ... I forgot to mention this earlier, is what happens with all of these credit accounts, whether it's a credit card, a mortgage, an auto loan, all of these accounts get reported to the credit agencies. There's three big ones. If you just look up credit bureaus online, it's a subject for another time. I also have some other episodes in the archives about this subject.

 

But it gets reported and says, "Hey, John Doe or Jane Smith has this credit line," and each month they'll say, "Oh, he or she's been paying it on time," or "not been paying it on time. Here's their average balance, and here's the credit score we're going to calculate for them." An auto loan could be a way to start building your credit, and so long as you're paying the loan on time, then there are many car dealerships that are used to working with people with very limited or bad credit, and they can find creative ways to make sure that you get into a car. And so long as you keep making your payments, then you can start building your credit, and the more you build your credit, the more you will be eligible for other things down the line.

 

A cell phone plan. Getting a cell phone in your name is also a form of credit. Oftentimes, the cell phone companies will report your credit numbers, and that can be very valuable to you. You just make your cell phone payments each month, and they will report that information to the bureau. Here's an example of how credit is used all the time in the cell phone world, is most people don't actually go to the store and spend somewhere between 500 and $1,000 on that cell phone and then walk out of the store. Most of the time, people are spending ... they might have a plan where they pay $25 a month until that phone is paid off.

 

Well, that $25 a month is a form of credit, and that's how a lot of people can keep up with the latest generation phones, because they're not spending $1,000 in the store. They're spending the $25 a month for however many years until they've paid off that phone or until they trade it in for the next model. That's a form of credit.

 

Another thing you can check is look for a personal loan, get a small loan amount. There's lots of peer-to-peer or personal loans companies available for people to start building their credit. Now, the big downside to a personal loan is that oftentimes the interest rates can be super-high, particularly if you don't have credit, but it is a way to start that process.

 

Now, when you go through all these ways to build your credit, you gotta be careful. You don't want to have a bunch of debt outstanding, but you do need a little bit of credit to be able to get more credit and be able to live your life and function normally as you would often like to, or maybe as you were before, except now things are in your name. And so one of the things you gotta be really careful is make sure you don't borrow more than you can, and don't leave outstanding balances. So if you have a credit card that gives you $1,000 of spending, well, make sure that at the end of the month you actually pay that $1,000 back. Don't keep that $1,000 outstanding and start paying that really high interest rate I mentioned before.

 

Don't miss payments. You know, if you have a payment due on the 23rd of the month, make a calendar notification that it's due on the 23rd, or better yet, set up auto billing, so that automatically those payments get taken out. Even I had to set up auto billing, because I have different accounts and things like that, and then you'll go three days and start getting a bunch of phone calls, and you're like, "Why is Chase calling me?" It's like, "Oh, well I forgot to make my payment on time, just because I was busy, nothing else." And so I switched to auto payments, so automatically they just pay the balance each month, and I don't have to think about it.

 

And also, don't spend too much. You know, just because you have the credit doesn't mean that you have to use it. So if someone gives you a credit line for $1,000, you don't have to spend $1,000 each month. You might just spend $100 of that 1,000 on groceries, and then pay it off at the end of the month, and that is just as good for you as you build your credit.

 

These are some things for you to think about, particularly if you have limited credit in divorce, and you're trying to get back on your feet. The sooner you start these things, the better. You don't have to wait until after the divorce is over. You should start these things today, and start building your credit, building your profile, and start getting to a position where ... This is one of those things that's a long-term process. Your credit's going to be with you for the next decades, and so the sooner you start with this process, the better off you'll be, because it's a slow process.

 

And so even if you have a lot of other things that you're trying to figure out, spend some time. I have applied, I've helped people apply for credit cards, where we get on the phone together or we go on the computer together, and we teach you. We go through what you need to put in for the different line items so you get approved for a credit card, to make sure that you start getting your credit. Or we'll compare credit card offers together, so that you start making the right decisions and start getting yourself in good financial shape, both during the divorce process and as you go on with the rest of your life.

 

Thank you for listening! Find a transcript of this episode below.

 

In this episode I'm going to discuss an important topic that I don't hear discussed very often. We're covering what jobs can you get when you have limited experience in the workforce. The reason I bring this topic up is because I have had a lot of discussion about this subject on coaching calls for the last few months and I think that it would be very helpful to talk about some of these things in the podcast.

 

This topic, excuse, me is much more important than many people think and for two particular reasons. Reason number one, if you are facing divorce and you might not have worked during the marriage, maybe you were taking care of the kids or doing other things, one of the big questions is what jobs can I find after divorce that might pay me a decent income so I can get on with my life. I want to give you some ideas in this episode of some jobs that actually pay pretty well. Now, you might not be making six figures on day one but you can make a decent salary.

 

Now, the other reason, reason number two that this is an important topic has to do with all of you on the other side of the equation, which is if you are going to be the person paying support particularly spousal support or alimony, one of the very important things you should be thinking about and trying to negotiate is what jobs your soon to be ex-spouse could obtain.

 

What's important about this because if your spouse, your spouse may not have worked during the duration of your marriage. Might be five years, might be 20 years or more or anywhere in between. If your spouse didn't work that's very understandable for a number of reasons. If your spouse has skills or has the capability of getting a job, even if that job only makes $20,000 or if it makes $50,000 or makes $100,000 or more. Well that money you can oftentimes subtract from the spousal support burden that you would have to be paying that spouse.

 

So, let me crystallize it for you very simply to make sure that that point is clear. Let's just say I'm going to keep the numbers very simple, but these might be higher for some people or lower depending upon who's listening. Let's say that you have to pay $50,000 a year in spousal support to your soon to be ex-spouse. Well, if you know that they can make $20,000 in income, be it as a teacher or an assistant or any number of jobs I'm going to talk about in a bit, well you can request and negotiate that instead of paying $50,000 a year in spousal support, you only pay $30,000 a year. That can be a substantial substantial savings to you.

I want to stay on this point for a bit before I get more into the jobs. Even though many people listening might not have an extensive work resume, if you are or if your spouse is of solid physical and mental functioning, there are a lot of job opportunities out there when you put your effort in. One of the frustrations that I hear from a lot of people is that they'll say or particularly people about to pay support is they'll say one of two things. Either they'll say that my spouse didn't work and so I have to pay them more. That's partially true. They'll also say my spouse doesn't want to work.

 

Well, if your spouse doesn't want to work and you're going to have to pay them support, you know, most people don't want to work. We would all like to have a permanent vacation or hang out with our friends or just raise our kids exclusively. Unfortunately in divorce situation you may have to or that person may have to realize that they now need to work.

 

One of the things is that there are often jobs available for them. Another thing to think about is that there are people called vocational experts and if you go to episode 164 of the Divorce in Your Money podcast I discuss that in depth as well and that can be a great source for you. If you're looking for a job you can go speak to a vocational expert but also if you have a spouse who's capable of working but maybe has some skills and could find a job, well, you can present to the court or to, as part of the negotiations, you can present how much income they could be making given their experiences. That could directly subtract from the support that you may be thinking about paying.

 

Now, I could talk about this topic for a long time and I am going to get into it quite a bit on this episode but I could stay on this point about vocational experts and jobs. It even surprises me the range of scenarios I see every day as I get to work with you in terms of who wants to find a job, who doesn't. I have some clients who have never worked before who are very ambitious about taking control of this process. I also have clients who were the earners and their spouses were trying to figure out well what kind of job could their spouse who might not have ever worked before, what kind of job could they get and how much could that be and does it make sense given their situation.

 

Anyways, what kind of jobs are we talking about? The point of this is to discuss jobs that don't require a lot of experience. I know that oftentimes one person may have just graduated high school and that was it. Then they raised the kids, took care of the family and that's the extent of their work experience is just a high school diploma. Others may have graduated college, maybe worked a couple years, anywhere in between, or were on the path with a successful career but chose to stay at home with the family. This applies believe it or not with both men and women.

 

I deal with a ton of women who were the earners in the family and the father stayed at home. They're the ones without the extensive job experience. So it applies to most families that I see and get to work with. I'll just say many families that I get to work with and people I get to work with during this process.

 

The question as I said what are the low paying, what are the limited experience jobs that pay a decent salary? I'm going to go through some job ideas and these jobs I know can pay you between 25 to 75 thousand dollars a year even if you don't have any experience. This means day one you're starting with a decent salary. There's plenty of articles online about some of these things as well. So you should look for high paying jobs or take some job quizzes if you don't know which one of these is going to fit for you. There's tons that I'm not even going to get into or get into with any depth that have a lot of opportunity within them.

 

So, let's jump in. I'm going to just jump into different ideas. I want to provide some ideas and some thoughts on different careers that you may need to think about or keep in the back your head because the job requirements are you show up and do the job, you don't have to have specialized degrees in many cases. The first category is assistant. Assistant, I'm going to break down to several subcategories because assistants can apply to a variety of fields. You can work as a public relations assistant. You can work as a legal assistant in a law firm. You can work as a medical assistant. You can work at any kind of administrative assistant if you have that type of skill sets.

 

Actually, when you think about an administrative assistant in the more general category of assistant, a lot of those jobs are work from home. A lot of those are part time and that's actually what I use. I have work from home and part time assistants and that works very, very well. They get to work flexible hours and I don't always have a full time staff person because I don't always need a full time staff person or at least in terms of the assistant categories. So it works for all of us very well. So, that's a great job to think about that almost anyone can do.

 

Real estate agent. Now real estate agent requires a license in every state but usually obtaining the license is not overly burdensome. There are depending upon where you live in the country, it can be in exceptional opportunity. One thing about real estate agents is if you have a good network, you can generate commissions on sales and that can provide a very substantial income boost for you.

 

Another area speaking of commissions and sales is salesperson. Now salesperson can apply to literally any industry that exists. Every business has sales. You can do it for any type of company. It can be a local business, it can be a national company, it can be anywhere. If you have the ability to sell a product from Tupperware to cyber security software to cars to houses to furniture to absolutely anything, you will have have the ability to have a sales job.

In fact, I am going to toss this out there for the listeners, if you are an excellent salesperson, I have a job for you. There is always opportunity in the sales world. Now, you have to be able to do it, it's not a free job offer but if you are good at sales I always, always and will for the rest of my life have a job opportunities for great sales people. So if you have that personality, that network, that hustle, that ability to generate a sale, there is always a place for you. Those careers can be very, very lucrative.

 

I have friends who sell everything from water bottles very well and make thousands, tens of thousands and some hundreds of thousand dollars on small products like that. I also have friends who sell multi-billion dollar contracts to governments for military equipment. At the end of the day, we're all just salespeople with different products. All right, I love sales so you can see I spent a lot of time on that one.

 

Project manager, very important role. It's sort of a step above if I would say administrative assistant so you might be able to command a higher salary. But also a great part time work at home job or a good in person job if you are someone who is organized and can stay on top of multiple projects. Particularly, if anyone is good at raising kids and if you have multiple kids, these days that is identical in many ways to the project manager role. So you might have that skill set and not even realize it already so that could be a great job for you.

 

Teacher. Teacher is a job that also oftentimes require some sort of certificate or training, but also like a real estate agent is not too burdensome. So teacher can be a great job. Now teaching doesn't pay super high most places on the pay scale. That said, it is a very good job that many people can consider pursuing if you like that. One thing I'm going to toss out, this is just neither here nor there at least in terms of the specific episode, but if you're thinking about the teaching route there is also lots of opportunities in the special needs world which is something that I like to think about a lot. It's not always the classroom, there's lots of great ways you can help in the teaching world if you do your research and figure out where there is a need because there's often a lot of students that are neglected out there that you could certainly make a big impact in someone's life.

 

The next category. City, state and government jobs. Now, this is a super, super, super, super broad category and it really depends upon where you live. There are tons of government opportunities. It could be in your local city government, it could be for a specific department like the water department or could be in the municipal building or could be at the library. Could be something like that. There could be state jobs that are available. Of course if you have a federal government branch for whatever department, I'm recording this near tax time, so for whatever reason the IRS is on the top of my head.

 

If you want to work at the IRS good on you but there are many different government jobs. The Federal Reserve Board is also just a few blocks away from me. That is just a government job, a very cool government job but a government job. And so if you have an inclination or if you're looking for a job those jobs are great, they have excellent hours and great benefits and could be a place for you to work.

 

Then there's always retail and restaurants so you can work at any of the retail stores. There's retail everywhere. I know it's a struggling industry at the moment but there are still jobs available and they will always need help with good people and restaurants as well. I think we all know restaurant jobs.

 

Then there is this special category that I leave for last that is also near and dear to my heart and that is online work. Now this is an emerging category. It's a very important one. If you have any sort of technical skills or an interest in technical skills, an interest in the internet and the online world, 100% of you are listening to me online in part because I love online and the internet world and I think it's very fascinating. If you have an interest in that world there are jobs for you. You can learn.

 

There are tons of these coding schools that exist many of which are very good and you can go to class for three months and the tuition is substantial but not overly burdensome. It's in a few thousand to maybe 10 thousand dollars or maybe 15 thousand dollars. But, over those three months, they teach you all you need to know about coding in a particular area and most of the schools have partnerships with employers and you can get jobs in the 60 or 70 or even higher range after just a few months and a few weeks of learning coding skills.

So if you have any inclination in that world and you like computers and I actually have, I know some of you from working with you, particularly those who live out in California certainly are inclined or are tangentially involved in the world but that is also a great opportunity. That's location independent. I get to work with you all across the United States because of the internet and technology and knowing some of the basics that are involved. It is also a great way even if you have no experience, if you're willing to learn and it's something that may interest you, it is an exceptional opportunity out there and there are some great ways to make that work.

 

These were all just ideas. I hope you find them thought provoking, fascinating. They don't require any experience. Basically, you can take someone off the street, anyone, even if they've never worked before and train people to do these jobs. Depending upon where you live in which job you pick and what the opportunity is, you have the ability to make a very decent income after divorce. Or if it is your spouse that you're thinking about, you should be pushing for a, if your spouse has the mental and physical capacity and they're not full time taking care of the kids, you should consider putting this as part of your settlement or discussing that point saying that within six months that spouse is expected to have found a job or however you want to structure it, that's something that we structure in many different ways.

 

Could be a year, six months. Could be immediately but they're expected to find a job and to work and that can substantially decrease your support burden for many, many years to come and save you thousands or tens of thousands or if not hundreds of thousand of dollars in support over a lifetime if you think about these jobs and figure out a way to include these as part of the settlement. Then just for the other side of things, it's a good way to be independent and not be dependent upon your spouse's support check coming every month. Because when it doesn't arrive one month that can be an incredibly nerve racking experience.