Mastering Finances Post-Divorce: 4 Helpful Tips
Going through a divorce is no easy feat. After the dust settles, it can feel impossible to regroup your finances.
Post-divorce, you’re looking at things through a solo lens rather than a combined effort. You may need to manage certain aspects of your finances for the first time. There may be debt involved from one factor or another. It might feel like a giant hill to climb, one that’s unattainable.
Know that it is possible, and you can rebuild. Down the road, once you get over the initial hurdle, you may even find yourself in a better place.
Here are some helpful tips for taking control and mastering your finances after your divorce.
1. Cut Back on Personal Spending
Now more than ever probably sounds like the perfect time to pamper yourself or indulge in some self-care. Post-divorce, you don’t exactly want to hide away in your house either.
You’re going to want to be more mindful of your spending during this time while you’re in your rebuilding era. You have a lower total household income, which means less disposable income.
You might not have thought about the small things while married, but you need to take each spending instance into account. Track where your money is going, whether it’s takeout, shopping trips, or that morning coffee. Know where you can cut back when you need to.
2. Update, Update, Update
This may be an exhausting task, but it is a very necessary one. You need to update any accounts and documents to reflect your new single status. If you’re changing your name, you’ll have plenty of accounts to change, as well as with the Social Security Administration.
Close any joint accounts you have and open a new account under your own name. If you have any shared credit cards, pay off that balance and close them. In the event that they can’t be closed yet, at least suspend them so further charges cannot be made.
Check your insurance plans that you have shared. Depending on what type of insurance it is, you may need to re-sign under a new plan.
Finally, check your beneficiaries on any financial accounts. God forbid something happens to you, you want to make sure your funds are directed to the correct or appropriate person(s).
3. Create a New Financial Plan
Consider your new financial plan a blank slate. For starters, you’re going to want to establish an emergency fund. As a single individual, you’ll want to keep aside about six months’ worth of living expenses. You’re going from a two-income household to a one-income household. If something happens with your job, you’re at an exposed risk. Whatever account you keep this in, you’ll want it to be quickly accessible.
Next, you may want to meet with a financial advisor, especially if this isn’t your area of expertise, to re-evaluate your long-term goals. What should your budget look like? How much should you be allocating to savings? Is there any debt that needs to be paid as a priority? What are your new long-term goals?
If you’re not in a position to meet with a financial advisor, explore financial education on your own. Read blogs, listen to podcasts, and pay attention to news sources. There are plenty of resources at your disposal.
4. Analyze Your Investments
As a couple, you have different financial goals, capabilities, and risk tolerance than you do as an individual. If your spouse handled the investments, you’ll want to make yourself familiar with your investments.
Make sure any of your investments match your new status and aren’t putting you into an unfavorable position. Educate yourself on the taxes and fees associated with each option you choose.
If you’ve gone through a divorce and are finding it difficult on the rebuilding journey, feel free to contact Wellness Matters.
Wellness Matters has therapists who have worked with many people after divorce, reach out to a mental health professional.
At Wellness Matters, we specialize in working with people dealing with all aspects of transition after divorce. Feel free to contact us today to set up an appointment.
At Wellness Matters, the intake process is all on-line and can be done in less than fifteen minutes. On-line appointments make it possible to attend appointments from the comfort from your home or office. In-person services may also be available for people living in northern MN.
