Getting a divorce is never easy. In addition to the emotions caused, there are all the matter of moving households, dividing up goods and deciding custody if pets or kids are involved. Another important thing to consider is your finances. After a divorce, you likely won’t be able to continue with the lifestyle you’re currently living because you will be on one income instead of two or will be using money awarded by the courts for alimony or child support. That’s why it’s vital to consider the following financial advice as you get divorced.
Review Your Finances
The first step is to review your current finances. You’ll want a picture of what you’re spending on food, housing, utilities, entertainment, clothing and other necessities, as well as how much you’re saving, contributing toward debt or spending on education expenses. You’ll need to compare this to your income. Not your income now. Your income after the divorce. Having a clear picture of what you are facing in terms of income and expenses helps you plan for your future after the divorce is final. Make sure to consider possible future expenses, such as braces for the kids, upcoming medical procedures and the need for a new car or an emergency nest egg.
Consider Alimony
If you’re going to be responsible for paying alimony to your ex-spouse, you need to be sure you budget for it. You’ll need to figure out the tax repercussions of alimony as well. If you’ll be receiving alimony payments, you’ll be taxed on them and will have to keep that in mind when you are making your budget. Remember, too, that alimony doesn't last forever, whether you’re paying it or receiving it. That means you also need to have a long-term plan in mind for when the money runs out. If you will be able to stop paying, you can put that money toward savings or investing and if you’re receiving the alimony, you’ll need to figure out how you’re going to replace that money before the terms run out.
Think About Your Career
If you’re leaving your marriage and entering the workforce for the first time in a while, it pays to think about your career before the divorce is final. As you look for a job, keep a budget in mind so that you can negotiate a salary that meets your financial needs going forward. You may need to take some classes or renew a certification before you can be hired and now is the time to address those needs. Get a clear picture of the cost of any additional training you need so you can consider that when making your new budget. Then, when you are ready you can go back to work with the peace of mind that comes with knowing how much you’re making and what you’ll be spending it on. You have enough to think about with a divorce and this will take one thing off your mind.
It Might be Time to Downsize
Many time, after a divorce, both parties are forced to downsize. Not only are you on a single income now, but you don’t need the space you might have needed before. It might be a good idea to consider moving to a smaller or less expensive home so that you are able to make your new budget work. Selling your current home can really help you put some money away and is a great idea if you’re looking for a new job or have children to support. It’s also a good idea to consider the utilities, which could be much lower in a smaller or older home. You might even consider renting instead of buying something new to further cut costs. Selling large or valuable items you no longer want or need makes it easier to move houses and gives you a bit more money to put in your nest egg.
Be Sure You Have Health Insurance
If you’re getting a divorce and are currently on your spouse’s health insurance plan, you may need to look at buying your own policy. COBRA is an expensive option and researching your other choices now is better than waiting until there’s no alternative. Your children can likely stay on their current plan, but you will no longer be a dependent and will need your own policy. If you work or are planning to return to work, you may be able to find an affordable option through your employer. You might also want to put some money aside, if you have it, so that you are prepared in case of a medical problem in the interim.
Put Money in Savings
It’s also important at this time to sock away some savings. You don’t want to be caught without backup if your car breaks down or you need emergency medical treatment. A savings account is a great place to store your emergency fund and you can even earn a little bit of interest at the same time. Most experts recommend having a few months worth of expenses in savings in case you lose your job.
All of this is a lot to consider and will require a pile or legal paperwork. If you’d like to draft a document or prepare an agreement with your spouse with regard to your divorce, consider letting an expert, like those at assignmentmasters get it done for you. That way you can be sure it’s free of errors and allows you to put forth your terms and get what you want and need from the divorce. There’s no reason to go it alone during such an emotional and stressful time. Getting your finances in order is one of the biggest things you can do to make the transition to your new life smooth and easy.
Getting a divorce is going to be worrisome and take some time but removing the added worry about having enough money is vital to getting through it without consequence.
Bio:
Having gained his English degree by the age of 17, William took on a clinical psychology degree, but dropped out after her first year. Then, after the unexpected arrival of his child, he settled into becoming a writer and a graphic designer. William knows a great deal about content marketing, visual marketing and graphic design.
Having gained his English degree by the age of 17, William took on a clinical psychology degree, but dropped out after her first year. Then, after the unexpected arrival of his child, he settled into becoming a writer and a graphic designer. William knows a great deal about content marketing, visual marketing and graphic design.