Bringing an end to a marriage can have more impact on your life than you might imagine. While the emotional and psychological toll can be significant, it’s also worthwhile to consider the financial factors. If you’re looking to get your finances in order after a divorce, you’ll want to consider following the steps below.
Understand What’s Changing
One of the most important tips for keeping your finances in order after you get a divorce is understanding what kind of financial changes are actually occurring. This means more than just understanding what the loss of your spouse’s income might mean – it means taking the time to generate a list of your new fiscal responsibilities as well as any new income (including child support and/or alimony) that you might be receiving. The best way forward is to understand what assets and challenges are going to come your way.
Do the Admin Work
The next step is to start taking care of the paperwork. Most married people have surprisingly entangled finances, even if they have separate bank accounts. Your goal should be to have your name (or your ex’s name) removed from any joint accounts, to close down any accounts that neither of you will keep, and to open up new accounts in your own name. You will also need to change your marital status on all of your relevant tax documents and to update documents if you choose to change your name.
Update Your Plans
Your next step is to start looking at your future. In most cases, this means updating what you expect in the next five, ten, or twenty-five years. For some, this means changing over to a more (or less) aggressive retirement policy, while others might be more concerned about removing their former spouses from life insurance policies or estate plans. It’s a good idea to take a look at your newly single life and to figure out how you’ll need to adjust your plan in order to achieve the future that is important to you.
Redo Your Budget
Now that you know what you want, it’s important that you give yourself the ability to get there. Creating a budget is a great choice for anyone, but redoing that budget is a must for anyone who has gone through a divorce. Even if you had the only income and you owe neither child support or alimony, you’ll still need to take a look at what it means to decrease your household size and to eliminate any bills that were due because of your former spouse. Whether the amount of money you have on-hand goes up or down after the divorce is irrelevant – you’re still going to need to make adjustments due to your new financial reality.
Talk to the Right People
Finally, you’ll want to talk to financial and legal professionals to make sure that your plans will stand up to the test of time. You’re going to have an awful lot of people telling you what you should or should not do as you go through a divorce and you can safely ignore most of them. Seek out the people such as family law attorneys and financial experts who can give you valuable professional advice and listen to them – they’re going to help to ensure that you make it through your divorce in as good a legal and financial place as possible.
Getting your finances in order after a divorce is largely a process of understanding your financial circumstances and changing your lifestyle to suit those changes. Take some time to figure out what has changed, to get advice from people who can actually help you, and to set yourself up for success. There’s going to be a lot of paperwork involved to get yourself back on track, but making it through the other side with a bright financial future really is possible.
Krishna Murthy is the senior publisher at Finance XOD. He is not only the senior publisher but also the owner of Tricky Finance. Krishna Murthy was one of the brilliant students during his college days. He completed his education in MBA (Master of Business Administration), and he is currently managing the all workload for sharing the best banking information over the internet. The main purpose of starting Tricky Finance is to provide all the precious information related to businesses and the banks to his readers.