Divorce affects all the involved parties and can be extremely stressful. The emotional toll, not forgetting the psychological and physical impact it has on a family can be quite devastating. Dealing with the allocation of assets and financial issues can be overwhelming and many people do not know where to turn for help in this area. As someone going through a nasty break up, it is vital to ensure that your finances are set up just right if you want to secure your financial well-being in the future.
Before looking at some tips on how to handle financial planning during a divorce it is worth noting a couple of things. One of the biggest mistakes people make when getting divorced is thinking that they are still entitled to the life they were living. When it comes to divorce, your life is split in half, the both of you get 50/50 and no one is guaranteed of maintaining the lifestyle the two of you were once accustomed to. At this point in time, it is advisable that you separate emotions from financial decisions if you want to make smarter choices. Remember, marriage is about love and trust, but divorce is all about money. When going through the divorce process, everything boils down to the concept of money. For that reason, here are some things to consider when it comes to financial planning during a divorce.
Talk To a Financial Planner Early
If you do not have a financial planner, then find one you feel comfortable working with as soon as possible. Oftentimes, it is one person who handled the finances, and in such instances, the other might not be so familiar with the financial accounts shared. It is, therefore, vital that you start searching for a professional early and being to create a synergy with the professional, so they can help you understand the different financial steps you will have to take. During this period, a lot of people engage the services of Deanhineslawer.com to guide them through the legalities of divorce but forget to look for a financial professional with expertise in the financial arena. Financial planning experts are essential in helping you find stability for the new life that is emerging.
Do Not Be Quick When It Comes To Dividing Your Assets
Sometimes, divorces can be contentious, pushing some individuals to make decisions regarding the division of assets too quickly without first putting some consideration into the matter. When you are too quick to divide your assets without considering some things, you might end up having the home while the other ends up with all the cash. When it comes to divorce and financial planning, it is vital that you leave your emotions at the door and that you avoid knee-jerk reaction when the question about who gets what is raised. Doing this will ensure that you get to make a decision that you’ve had time to think about. One way to go about it would be to co-own the house until it is sold. Houses are hard assets that cannot be turned into money that easily and cash is extremely crucial for emergency situations and purposes. With all the changes currently taking place in your life all at once, it is vital to ensure that you can cover all and any unplanned expenses that may arise.
Come Up With A New Investment Plan Once Your Divorce Is Complete
It’s extremely vital that you create a new personal investment plan once the dust has settled. Knowledge is power. Now that you are starting all over again, you have the power to empower yourself to start the process of making financial security for yourself. This is the time to reflect on all of your past financial decisions and settle for those that will guide you to a more fruitful financial future.
Review Your Expenses and Financials
When reviewing your financial situation, take the time to consider your tax situations, assets, expenses, and income sources. While there is no divorce that resembles another, maintaining two separate households tends to be more expensive than another. To find out what you will have to spend after your divorce, review your expenditure before the divorce. Review your past year’s bank statements and credit cards, summarize your expenses by categories and create separate columns for your kids, your estranged spouse, and you. Once you have tallied everything, you should have a good idea of what you can afford from there onwards, making it easier for you to decide how you will use the money after divorce. If you have children, make sure that to factor them in your future financial planning as they will still need financial support from you.
Plan Your Career
Finding your way back to the workforce can seem rather daunting; however, there are plenty of benefits this presents. The money you earn could help build and structure your financial plan, and your job should help boost your social life, confidence, and happiness- workplaces are great places to meet new people. If you’ve been out of the workforce for quite some time, then you may need some training or education to obtain marketable skills. It is, therefore, advisable that you start thinking of how and what you need to do get back into the workforce. If you need training or a degree, then consider negotiating this during the divorce and have your spouse pay for it. If it is a collaborative divorce, your spouse would want to know that you can still make ends meet, so when you ask for their help to get training or an education, they might offer to help, but that is if you ask.
Do Not Forget About Health Insurance
Health insurance can be a substantial expense if you were under your spouse’s policy. As such, this is one of the main things to consider when it comes to financial planning during divorce and should be part of the reason why you should be going to work again if you did not have a career or job. Working again can help bring in the professional connections, self-confidence, and income you will need after divorce and can help convince you that there’s, indeed, life and financial wellbeing even after divorce.