Dealing with financial matters after a divorce can be difficult. But knowledge is always power. The more you know, the better off you'll be.
So why not get started learning today? The following information contains advice on how to survive financially after a divorce, ranging from an agreement on assets distribution to mediation. So no matter what your needs are, you'll have an understanding of how to survive financially after a divorce.
1Agreement On Assets Distribution
Agree on how to divide your assets. A particularly difficult thing in any divorce is the decision of who gets what. You and your spouse both may have an economic and emotional investment in almost everything, from the house to the art collection you acquired together.
It is beneficial to avoid having the lawyers get involved in the process. Once the legal system is formally involved, the process is much more expensive. It can be financially and emotionally draining.
2Try To Mediate
Mediation can be a money-saving alternative to the court. This way, everything is a process, a give and take, and agreed upon under the guidance of an unbiased third party. You can opt for methods of dividing the assets that are financially best for both of you.
For example, with investments, it's usually better to divide them and sign them over instead of selling them and splitting the money. This is because selling them can generate considerable fees and taxes. If you go to court, the court may order the sale of the portfolio, making you liable for the fees and taxes.
3Review Your Financial Documents
Assess what remains. Be sure that every little thing is truly concluded. Make sure that you cancel any joint bank accounts.
Cancel any joint credit cards. Do whatever changes you need to your life insurance. Do the same to any other policies.
4Live Within Your Means
Are you the main breadwinner in the relationship? You might have to make monthly alimony or child support payments. And if you don't have a higher salary, you will still have less total income than you did previously.
Rather than slide further into debt, downsize your lifestyle at least temporarily until you feel financially comfortable again. This may mean a smaller home or apartment or less expensive vacations. It may mean a much more significant change, depending on your ability to earn income.
5Establish Your Necessary Income
Do what it takes to get back on your feet. Connect with your family and friends to let them know that you're looking for a job or an opportunity to make extra income. Network on social websites as well.
6Make A Plan
You'll need to plan your savings, investments, and budget. If you are not the primary earner, you have two challenges: replacing the lost wages and rebuilding your credit. The good credit you had as a couple may not be as good after the divorce.
One of the only advantages of a divorce is the ability to change your lifestyle and spending habits drastically. It is easier after the divorce. This is because it doesn't require agreement from both parties.
No one gets married with the expectation of getting divorced someday. Regrettably, divorce rates are expected to continue climbing. Divorce affects all areas of your life, including your financial health, and can result in significant challenges.
Take some time to educate yourself further on personal finance to help get your finances back in shape. Start today by applying these tips. You'll bounce back sooner than you thought.
Jackie Wing is an Alaska native who enjoys snowboarding more than is probably socially acceptable. She lives in Anchorage with her two dogs Reese and Peanut or as she likes to call them Thing 1 and Thing 2.