Here are a few tips to consider that will help you make smart financial decisions during the divorce process.
Evaluate your needs moving forward
When creating a financial plan, it’s essential to understand your needs moving forward. What will be changing for you as a result of this divorce? Are there any changes to your income? Do you need money for relocation, separation of shared property, or debts? Will you need new insurance coverage?
Creating an honest assessment of your finances allows you to be better prepared for any upcoming expenses. Start by creating a budget that regulates all the costs associated with divorce, including legal fees, child support, and alimony. Once you understand your financial needs, you can forge ahead and create a personalized plan that works for you.
Take an honest look at your assets and liabilities
During your divorce, you’ll want to make a comprehensive list of all your assets and liabilities. This means not just your bank accounts and retirement plans, but also any property or investments such as IRAs, stocks, life insurance, Bitcoin, high-yield savings accounts, and certificates of deposit that could be affected by the divorce.
It’s crucial to be upfront about any debts or obligations you might have, and not overlook the value of your assets. This will give you a better understanding of your financial situation as you navigate the divorce proceedings.
Set goals for yourself
Now that you’ve evaluated your financial situation, it’s time to set some goals. Do you want to buy a new home? Are you thinking of starting a business? Setting financial goals for yourself can help you stay motivated and focused on your future. Make sure the goals are realistic, and create an action plan that helps you reach them.
Consult financial professionals
Due to the complicated nature of divorce, it’s important to work with professionals you trust. Speaking with a financial advisor before making any significant decisions allows you to evaluate your current situation and navigate the financial implications of your choices. A financial planner can also help you craft a plan that matches your new financial situation and provide emotional support throughout your divorce process, which could prove useful if you end up in a contested divorce.
If you and your current spouse share a financial planner, you may want to consider hiring a new one for yourself. Doing this allows you to hire a financial planner who specializes in divorce and understands your state’s or country’s laws concerning divorce and marital and separate property. You can also avoid dealing with a conflict of interest should your current shared planner have an unwitting bias in your spouse’s favor and put fresh eyes on finances that could help spot any unnoticed issues.
Create an emergency fund
Divorce is expensive! Therefore, preparing for unexpected costs is pivotal for your current and future financial security. Consider setting up an emergency fund for financial cushioning in case of emergencies. Even if it’s a small amount, setting some money aside can provide peace of mind during this challenging period. Below are some examples of how you can save and acquire more money:
- Set savings goals
- Get a second job
- Pay off high-interest debt
- Track your spending habits
- Set up automatic transfers from your checking to your savings account
- Cancel unnecessary subscriptions
- Have a garage sale
Be patient
It may take some time to adjust to your new financial reality, so be patient and avoid rushing into any decisions. Take things one step at a time, and make sure each decision is right for you. Doing this is especially important when considering your assets and debts during your divorce so you can get your fair share of both.
Although it can be difficult to manage finances during such an emotionally charged time, these tips can help you create a solid financial plan that will help secure your future. So, take the time to understand your needs and consult with professionals as needed. With some planning and patience, you can stay on track financially during and after your divorce.
Stay positive
Remaining hopeful during your divorce can be challenging. However, maintaining a positive mindset will benefit you and your family as you progress in life. Though there may be times when you feel like everything is falling apart, a solid financial plan will help you rest assured that your future is secure. As you maintain a good attitude and dedication to your goals, you’ll overcome this challenging time and come out on top.
Key takeaways
- Consider your needs moving forward when creating a post-divorce financial plan.
- Take an honest look at your assets and liabilities during the divorce process.
- Set realistic goals for yourself and create an action plan to reach them.
- Consult with financial professionals before making considerable decisions.
- Be patient with yourself, and don’t rush into any decisions.
- Create an emergency fund to prepare for unexpected costs.
- Stay positive throughout the process.
Divorce is a trying time, but with some dedication and planning you can guard your financial success. As you take the time to consider your needs, set goals for yourself, and consult with professionals when needed, you can move forward confidently after your divorce.
Mark M. Childress is the Founding Attorney of the Law Offices of Mark M. Childress. Mark is a fierce legal advocate who uses his extensive litigation experience to help clients with various family law needs. Mark and his team have garnered a stellar reputation for providing customized one-on-one services and for vigorously pursuing the best possible outcome for the clients they represent.
