Three steps for rebuilding financially after a divorce
This article looks at some of the steps people should take in order to rebuild financially after divorce.
It’s no secret that divorce can take a significant toll on one’s finances. The marital estate that two spouses have built up together over the years will have to be split in two and each spouse may have to adjust to life on a single income and without the financial support of the other spouse. While divorce can feel like a shock financially, adjusting to the new financial realities of life after divorce is not impossible. In fact, with a little preparation, those coming out of a recent divorce will be better prepared for what lies ahead and will be able to take greater control of their financial lives.
Know what’s ahead
As Forbes points out, many of the problems of adjusting financially to life after divorce are caused by people not having a clear idea of what their financial position actually is. This is especially a problem for those who are coming out of a marriage where the other spouse largely took control of paying the bills and managing the family finances. For the newly divorced, it is necessary to become savvy about finances quickly. The most important step is to write a detailed budget with all monthly expenses along with income – including income from spousal or child support – in order to gain a better idea of how much will be needed to support oneself and one’s family after a divorce.
Emotions can often get in the way of sound financial planning at any time, but especially so when a marriage is coming to an end. While it can be tempting to celebrate one’s newly found freedom and independence by indulging in some expensive item or vacation, it’s important, as Time notes, to live within one’s means right from the first day after the divorce papers are signed. Even among those who have created a budget to prepare themselves for life after divorce, unexpected expenses can still arise. In many cases, for example, the spouse who holds onto the family home quickly finds out that maintaining a home that was built for two or more people is much more difficult than he or she had anticipated on a single income.
While divorce may not be the happiest of times in many peoples’ lives, it is an opportunity for people to take full control of all aspects of their lives. In terms of finances, taking control means creating a set of goals – which could include paying off debts, putting the kids through college, saving up for a trip abroad, and so on – and figuring out how to make those goals a reality. Again, for those who have mostly let the other spouse take control of the family finances, now is the time to learn about investments, RESPs, pensions, and other financial products that can help get them to their financial goals independently.
One of the best ways of beginning life after divorce, however, is by ensuring that any divorce settlement is fair and in one’s best interests. A poorly negotiated settlement could lead to financial and emotional pain for years to come. A family law attorney can help anybody who has concerns about their own divorce settlement negotiations. By seeking the help of an experienced attorney, those going through a divorce will have somebody on their side fighting for their best interests.