Going through a divorce brings massive change in nearly every part of your life. Even the most amicable divorce comes with its share of stress, difficult choices and unexpected emotions. So it’s a good idea to make the transition as simple as possible for yourself. At a time when you’ll be dealing with some turmoil, preparing for your life post-divorce can be a great tool to ease into those changes.
Your finances are one area of life that will face some of the most drastic changes. Here are some ways you can safeguard your money and prepare for the next steps:
Take Stock of Where You’re At
If you’re feeling anxious about your financial situation, the best way to deal with it is to get an accurate portrait of where you stand. Hiding from it isn’t going to help you. No matter how dire your situation, you can’t improve until you see the whole picture. Look at what money you’ve got coming in, your expenses, your assets and your liabilities. Once you know where you’re at, you can plan your best course of action.
Set a Budget
Budgets are useful for stable times, but they are imperative in times of financial upheaval. Your financial situation is probably very different from when you were married, so you need to adjust to your new cash flow. Keep track of what you spend, figure out where there is excess and see where you should focus. Your budget might just start with you writing down everywhere your money goes, but down the line, you will be able to better plan your wealth allocation.
Creating your budget will also help you plan out your new money goals, which will keep you focused.
Check in with Your Credit
Your credit may have taken a hit in the divorce. Just like your cash flow, you will need to know where your credit score stands. You might find that you need to do some rebuilding. Get a copy of your credit report and see where your weaknesses lie. It could be as simple as using credit cards responsibly or as complicated as building from the ground up, but either way, there are options to boost your credit to a healthy level.
Do Your Financial Housekeeping
It may be boring, but you should update your information on your accounts as soon as possible. If you’re changing your name post-divorce, make sure all of your important documents and accounts reflect that. Also check the titles on your assets and beneficiaries on your insurance and retirement accounts.
Seek Out a Financial Planner
Divorce is an all-encompassing life change, so don’t be afraid to reach out to a financial planner for further help. Some people are hesitant to talk to a financial planner because they’re self-conscious about their financial situation. However, having a professional, outside perspective on your money can be just what you need to get back on track.
About Your Richest Life
At Your Richest Life, Katie Brewer, CFP®, believes you too should have access to financial resources and coaching. For more information on the services offered, contact Katie today.