Divorce can be a tumultuous time, especially when it comes to finances. The stress of making ends meet can weigh heavily, particularly for the lower-earning spouse.
Losing a dual income and dividing assets can leave you feeling financially vulnerable. However, with the right steps, you can rebuild and even thrive.
Actions that help rebuild your finances
Reclaiming your financial independence starts with a clear plan. Here are four actionable steps to help you get your finances under control:
Separate your financial accounts
One of the first steps post-divorce is to separate your finances from your former spouse. This includes retitling assets, transferring bank accounts and splitting retirement plans. It might take time, but handling these tasks as soon as possible is crucial to avoid future complications.
Remember, some ties, like child support and alimony, may remain for years. Plan accordingly by discussing long-term strategies with your attorney and other advisors.
Assess your new situation
Being newly single offers a fresh financial outlook. Start by assessing your assets, debts, income and expected expenses. This can help you understand your current financial standing.
Track your spending and adjust your budget to live within your means. Also, update your tax withholding at work to reflect your new status to avoid a surprise tax bill.
Set realistic long and short-term goals
Planning for the future is essential. Establish clear financial goals that may include building an emergency fund, paying off debt, saving for retirement or even buying a home.
Rethink and redefine your financial objectives to suit your new circumstances, which will help you navigate your financial journey more effectively.
Don’t forget about your investment accounts
The financial changes brought by divorce may necessitate a review of your investment portfolio. Dividing marital assets can lead to an imbalance in your investments.
Working with a financial advisor to realign your portfolio to match your post-divorce financial goals and risk tolerance. This ensures your investments are on track to support your redefined goals.
Ensure a fair distribution of marital assets
Starting your new chapter on the right foot hinges on receiving your fair share of marital assets. This distribution can set the foundation for your financial recovery.
Working with an experienced divorce attorney can help ensure a fair and equitable division of assets, safeguarding your financial future.
Rebuilding your financial life post-divorce is challenging but achievable. By taking control of your finances and setting clear goals, you can move forward with confidence.