Going through a divorce can be emotionally challenging but can also have a profound impact on your finances. After all, the same pool of assets and cumulative income supporting a family now has to support two separate households.
Unfortunately, most people who file for divorce do not prepare themselves financially. As a result, they have trouble moving forward financially after divorce. If you are struggling financially after a divorce, you need to be proactive and take steps immediately. In this post, we look at some of the strategies you can consider to move forward financially after divorce.
Address Your Feelings during the Divorce
When a couple goes through a divorce, a lot is happening on the emotional front. Plus both partners are going through a lot of feelings from the time they realize divorce is the only solution till the time it happens. It is natural to develop anger, frustration, sadness, and a lot more when going through a divorce. And when a person is dealing with so many emotions simultaneously, it has an impact on their cognition and decision-making.
Hence, once the divorce is finalized and you plan to move forward financially, perhaps the most critical step is to address your feelings. If this means going to the professional for support, then you must go for it. Only when you address your feelings and get mental clarity you will be in a better position to move forward financially after divorce.
Set up Financial Goals
With a renewed sense of self, it’s time to give yourself a fresh start financially. Take a look at your financial profile and set up goals for yourself and your family. Are you hoping to set aside a certain amount of money for your home’s payment? Or do you want to clear off your previous debt within a certain amount of time? Or are you hoping to save for your children’s college education?
Moving forward after a divorce, set up financial goals and determine how you plan to accomplish these goals.
Rework Your Finances
Moving forward financially after divorce is not possible unless you rework your finances. Take a closer look at your monthly income while considering some additional responsibilities such as child support or alimony payment. Make sure you rework your finances and come up with a budget that fits in your new financial reality and aligns with your financial goals. If you find yourself in a financial situation where you don’t have enough income to support your current standard of living while staying out of debt, then it is an indication that you need some major rework for your finances.
And while you are reworking your finances and preparing a new budget, make sure you have a plan to deal with debt. When you go through a divorce, you may find yourself indebted for legal bills, so you need to plan how you intend to pay off this debt. Moreover, you also need to have a plan of action for paying off your previous debt. You can go for refinancing the debt, or you can work on your budget so you can make timely payments to keep the debt low and gradually get back on track.
If you didn’t have any credit card or loan in your name during the marriage, you can also consider building your credit history as it will help you when you are renting a property or buying a new home or when applying for any loans in the future.
Prepare for Emergencies
While you are reworking on your budget, make sure to have a plan for emergencies. Does your current budget have an allocation for an emergency situation? How do you intend to support yourself or your children if you lose a job or need hospitalization? Don’t forget to prepare for emergencies when you are reworking your budget. And determining the amount of savings you will need.
Moreover, it’s a good time to explore health insurance options. If you were getting your health insurance through your former spouse, now is the time to find out how you can get health insurance on your own. Furthermore, if you were covering your former spouse through medical insurance, you should also make sure that he or she is no longer taking advantage of your policy.
Invest in Your Future
Moving forward financially after divorce may require you to take some aggressive financial decisions. And one of them is to invest in your future. If you are earning today, you are likely to retire down the road, and now is the time to think about how you are going to sustain yourself in the future. A good approach is to automate your savings every month. With this automated saving approach, you will be putting money into your savings account or a retirement fund every month. Thus, accumulating and serving you years later.
It’s always easy to take a back seat and procrastinate. But when it comes to moving forward financially after divorce, the key is to start right away. When you don’t waste any time and rework your finances immediately after divorce, you will not lose any valuable time and more finances. Allowing you to move forward financially with a renewed purpose. The faster you address your feelings, set up financial goals, and rework your finances, the more confident and comfortable you will be after a divorce.
Moving forward financially after divorce can be daunting, but it is easily doable. The key is to be proactive and follow these steps. Then before you would know it, you will be in a much better emotional and financial position.