When Ties Are Severed: Keeping Financially Stable Following A Divorce

A divorce can be financially devastating for one or both parties. Often, people will lose at least half of what they accumulated during their life. Divorce can cost people their investments, home, business, retirement and future earnings for child support, spousal maintenance or both. This goes for men and women alike. Both are susceptible to huge losses. Often, divorces lead to an explosion of expenses at the same time income withers. Here are some tips on how to become financially stable again or retain financial stability following a divorce.

Inventory Your Financial Life

According to Divorce Matters, a divorce lawyer, one of the first things you will have to do is financial disclosures for the court. This is the perfect time to print a spread sheet and make an inventory of your history with money. You will need to submit income and assets for the court, but your goal to remain financially stable or recover will require you to also list expenses and liabilities. This information will help you keep track of you problem areas.

Make Sure Your Accounts Are Set up Correctly

This is essential advice that is dependent on a few things. Since each case is going to turn out differently and post-divorce financial obligations vary, the first thing you should do is consult with your legal representative and a financial planner. Do not take advice from anyone else, and you need to make sure the two are in agreement on what accounts to have and how to set them up. The last thing you want is a contempt charge or another court visit to undo your hard work. The reason this topic is listed here is because the advice is crucial for your retirement accounts. Get familiar with the rules, but don't try to be your own lawyer. Protect your future financial stability too.

Identify Priorities

Divorce usually comes as a surprise even if you could feel it coming or initiated it, so it is almost always overwhelming. It is a fact of life, but it is also financially dangerous. When your plate gets too full, you could freeze up or even go on massive spending sprees to make yourself feel better. First, take a look at your budget, and you have to honestly ask yourself, "Do I have enough income saved or coming in to meet all of my expenses?" If you do not, then you have to solve that problem. Next, if you have custody, make it a requirement your ex-spouse covers life insurance for you and the children.

Finally, if you are having problems solving these dilemmas, talk to someone with no emotional ties for advice. Often, emotions hinder people's abilities to solve simple problems. If budget concerns are not a problem for you, you can set other priorities to achieve greater independence and move on. You could add a number of progressive things to your list, such as finding a new job, continuing an education or even moving. Make the list starting with the most important at the top, and tackle one problem at a time.

These tips are not infallible, and they will not fix your financial problems overnight or instantly restore your financial stability. Every aspect of divorce from the emotional details to the financial ones take one day at a time. If you approach it this way, things will improve dramatically from start to finish. Rebuilding and maintaining is more than possible through a good support system and sound decisions.