If you're in the process of a divorce, consider the positive and negative ways a divorce can impact your pocket book directly and indirectly and how to prepare yourself to recover, financially. The aftermath of divorce, both spouses do have troubles dealing with the feelings of failure, loss, regret, and they will likely struggle financially as well. There may be issues of child support, alimony, asset-division, and legal fees to be paid as well.
The thing with divorce is that it stays with you in life, and it wears on the pocket book as much is it wears on your emotions. Many people don't realize the toll a divorce can take on their finances. The emotional and financial challenges of a divorce are difficult to get your mind away from, and divorced couples tend to go gaga in midst of the chaos, as facing all the stress and realities all at once becomes too much to bear.
When couples are in the throes of ending their marriage, the first concern is usually ending the relationship. If there are kids in the union, then it's child custody, after which it will be time for assets splitting, which is usually bank accounts, valuables and of course the house and it's contents.
It’s possible to have a financially fair divorce that fits your family situation without going broke, if you are smart. Below are some of the things to put into place to ensure your finances do not suffer the shock of divorce.
Understand your Finances
So many people don’t understand the level of their finances, or they may not be directly involved in the finances of the family. When you are less knowledgeable about your finances, the more difficult it is for you to make the right decisions. First, begin with figuring out the debts and assets you and your spouse have and ensure you have all your financial statements printed out. Consulting a financial adviser for guidance would be a good thing to do, as decisions on divorce are permanent decisions that cannot be changed. If done improperly, you will suffer for it all the rest of your life.
Have a Budget
You should make a budget of all your expenditures such as living expenses, child support, rent, maybe spousal support, vehicle payments or value, among several other expenses that are needed to run a home. Considering the fact that you were living with your spouse before, now it will take additional effort to maintain the same level of living when you both were in same home and now that you have divorced. The trick here is that you will have an idea of what you will need to live a decent home, if not up to the previous standard, but a comfortable one.
Revisit the Terms of Agreement
Ensure that during the divorce process you set up a road for renegotiation just in case you need something to be readdressed in future. Having an amicable divorce process is better for all the parties involved in the process. It is good for you, your kids and for your finances. We understand, this doesn't always happen but it's best.
If you are in need of some guidance on how to navigate your finances with regard to your separation and divorce, please contact me. I am a Certified Divorce Financial Analyst as well as a Certified Financial Planner and here to help you wherever you are within the process.
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