We’ve all heard it said that people often struggle financially for months or even years after divorce. For some, this is because it can be hard to find work or simply manage paying bills on a single income. It’s this fear of financial ruin that can make even the most unhappy of spouses hesitate to ask for a divorce.
Divorce doesn’t always have to end this way, however. There are plenty of proactive steps spouses can take right now to ensure post-divorce financial recovery. In this post, we’ll look at just five of the many steps that spouses can take before filing for divorce:
1. Know where your money is and where it’s going.
You need to have a clear idea of your assets and liabilities anyways for property division, so why not start making an inventory of your assets and liabilities now? By keeping track of things now, you will start to see patterns that can help you create a future budget in addition to seeing what you alone will be responsible for post divorce.
2. Make a list of your post-divorce financial goals.
Do you want to buy a new home? Travel? Do you need a new car? Carefully consider your post-divorce expenses now so that you can make the necessary financial arrangements soon after your divorce. This can include but is not limited to talking to a bank – or even family members – about a loan, filing bankruptcy or something else.
3. Set up automatic transfers from your checking account to your savings.
If you plan to retire at a reasonable age, putting money away in savings is a must. Naturally, divorce can wreak havoc on these plans. There is a silver lining, however: If you don’t miss the automatic amount taken out of your paycheck each month now, you may not miss it post divorce either. This will ensure you are still adding to your retirement fund instead of getting caught up in the “I don’t have enough money” feeling post divorce.
4. Make a budget and stick to it.
Budgets after divorce are just as important as they are during marriage. The only difference post divorce is that you won’t have your spouse’s income to offset impulse buys or other unnecessary purchases. Considering your expenses post divorce and making a budget now will help prepare you for your new financial situation so that you can hit the ground running after finalizing your divorce.
5. Monitor your portfolio and adjust to financial changes.
If you’re lucky enough to have a retirement account before and after your split, make sure you don’t neglect it. This is especially true if it was subject to community property rules and was cut in half in your divorce settlement.
Keeping an eye on your portfolio and making changes based on your new financial situation will ensure you are staying on top of things so that you can have a better financial future later on.