A key focus of my blog is Financial Literacy/Money. A divorce is a major negative event for everyone involved with long lasting ramifications. One of the key areas affected is the personal finances of the people splitting. The following contributed post is entitled, How To Be Good With Money After A Divorce.
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When you get a divorce, a lot of things are going to change, and one of those things is your financial situation (for most people, that’s the case, at least). No matter how long you were married for, it’s likely at least some of your bills will have been shared, so it’s going to be a challenge to work out how to pay for them yourself as a newly single person.
This is why it’s so important to put in the effort and hard work before you are divorced (but when you know it’s got to happen) and have a plan for when you’re on your own. With that in mind, here are some things to consider if you want to be good with money after a divorce.
Assess Your Current Finances
The first thing you’ll need to do is to assess your current finances and see what you’re paying for and what you’ll need to start paying for once you’re divorced. This is something your Freed Marcroft’s divorce lawyers will need to go through as well, so it’s well worth doing it in advance so you know what’s what and so your lawyers can see how they can help you when the time comes as well.
Get all your financial documents together, like your bank statements, tax returns, investment accounts, and anything else. When you go through everything, you’ll have a much clearer idea of where you are in terms of your finances, and you’ll be able to make much better decisions about money.
Make A New Budget
After a divorce, your income and expenses are going to change in some way, and it might be that you need to pay for money but with less money coming in. That’s why it’s a good idea to start a brand-new budget that takes all of this into account and helps you understand how much money you still need or how much will be left over.
If possible, you’ll need to put any ‘spare’ money into an emergency fund, and you’ll also want to save for retirement, so anything that’s left over really does need to be put away in a safe place. If there’s nothing left over and money is going to be a struggle, it might be that your lawyer can help, but otherwise, there are government grants and other help available; the earlier you know that you’re going to need financial assistance, the earlier you can apply for it.
Manage Debt Wisely
You might have a lot of shared debt after a divorce, and even if you’re no longer married, that debt still has to be paid, otherwise, you can get into a lot of trouble and a lot of financial difficulties.
Look at your debts and make a list of them in order of priority (the ones with the higher interest should go at the top). In that way, you’ll know which ones to focus on, and you can work out a repayment strategy that works for you and reduces the debt as quickly as possible.
