Whether you are planning for divorce or are in the midst of a contentious separation, family and friends may focus on helping you recover emotionally. After all, a divorce can be almost as traumatic as the death of a loved one.
In both situations, however, life goes on. So divorcees must plan for a financial recovery as well. Most new divorcees will have less income, and they may have larger financial obligations. Because of this, planning is essential to maintaining a similar standard of living. This post will highlight a few important points divorcees should consider.
Focus on eliminating debt – It is natural to consider bankruptcy to eliminate debt that severely hampers a reasonable standard of living. If bankruptcy is not the best option for you, taking time to pay off debt before incurring new debt is critical.
Budgeting is key – Yes, eliminating debt is important, but it cannot be done without knowing what’s coming in and going out every month. Budgeting through your own earnings is essential regardless of whether you are awarded child support or spousal maintenance. Child support may be inconsistent depending on the obligor’s employment, and maintenance may only be temporary.
Consult a financial advisor – Awards of deferred compensation from pensions or retirement accounts are not just being given in gray divorces. An experienced financial advisor can help you manage future disbursements.
Be careful about major purchases – This recommendation goes without saying, but it is worth noting that emotional purchases could be the beginning of financial disaster after a divorce.
The preceding is for informational purposes only and is not legal advice.