10 Tips For Handling Your Finances After a Divorce

Handling your finances following or during a divorce is always as overwhelming as it is emotional. Your initial plans of financial mana...


Handling your finances following or during a divorce is always as overwhelming as it is emotional. Your initial plans of financial management can seem a little difficult to execute as efforts to adjust to a new situation are likely to take much of your energy. Some things have to change, and that affects almost all your previous plans, including the best-laid financial plans. This is a completely new setting and one thing leads to another. Take it easy and take one step at a time. The following tips will help you secure your financial stability even after a bad divorce.

#1. Track your expenditure

The first step towards gaining full control of your finances is by understanding what you are spending. You may do so by having a good record in a spreadsheet, or through a phone app. Make sure you detail even the smallest of expenses, the so-called miscellaneous expenses end up taking a large chunk of your money.

#2. Come up with a realistic budget
Divorce will alter your spending and saving patterns, no doubt about that. It is a transition period and if stress gets the better of you, you are likely to get yourself in a crisis. Handling finances after divorce requires emotional stability. Sober up and structure a realistic budget by examining your income, as well as your necessary expenses.

#3. Update all your accounts
Your financial items will require name change after divorce. Ensure that your accounts bear your correct name. These include bank accounts, insurance policies, title deeds, wills, and other financial documents. Depending on the nature of divorce, some of these steps need to be taken during divorce, or immediately after to avoid unwarranted legal tussles.

#4. Conduct a thorough personal financial evaluation

Evaluate your financial inventory without leaving anything to chance. See what you have in terms of accounts, credit cards, investments, and anything that aligns with you. It is the way to understand the graph of your financial grip. Once you’ve done that, you can assess better financial deals for the existing products to see what you can keep and what you can drop.

#5. Get your priorities straight

Divorces have seen even the strongest crumble financially and if you are not careful, you could find yourself part of the statistics. You will be overwhelmed by events, face it, but there is no other way. You are the manager of your own finances. Begin with what is important for you and your family. Feed your children, clothe them, and provide good shelter for them; the rest appears on the next page.

#6. Create an emergency fund as soon as you can

After you’ve taken care of the basics, it is necessary to put in place an emergency fund. There is always something you can do without in your list of expenses. That is the money you should be channeling to savings to take care of you when times are bleak.

#7. Review your Credit Report

In the event that you ran a joint account, your credit score will be affected by divorce. Handling finances after divorce does not stop with budgeting, but with preparing a platform for a new beginning without your partner. Check your credit report and find out how it looks like, some issues will require solving. You need a strong score under your name and your credit report provider should be in a position to give you expert advice on the same.

If you need help getting your credit in order, click here.

#8. Secure your retirement and insurance

It happens sometimes that couples share insurance and retirement plans, or a spouse’s retirement plan is provided through the other’s job. All this changes drastically after divorce and new terms need to be made. With your everyday expenses comfortably taken care of, and emergency savings untouched, your next focus should be on life after retirement. Currently there are different retirement plans; some professional advice should be handy.

#9. Check your tax implications

Seek advice from a professional to see what can be done in terms of tax strategy. Divorce might impact your tax situation in a number of ways hence the need for entering into a new income tax bracket like receiving or providing child support.

#10. Seek professional help

Regardless of whether you are a financial expert or an attorney yourself, divorce has a way of weighing down even the strongest. More than ever, you don’t need to make hasty decisions alone; some could be irrational and you know where they could lead you. Create time and speak to a reputable professional for financial guidance. That could mark a completely new dawn in handling finances after divorce.

Check out BWCCU if you are looking for information on improving your financial situation.

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