It’s no secret that going through the process of a divorce can affect you mentally, physically, and financially. As you begin to navigate your new normal, perhaps the most important thing to lock down fast is your finances. Consider the tips below on how you can manage your finances after a divorce.
Update Your Accounts
Though going through the process of cancelling your joint accounts can seem like a tedious task, it’s important you take the time to do so as soon as possible. Most banks will be accommodating and understanding of your situation. Beyond transferring over certain accounts to your name, you should also consider your previous investments as a whole. Go through the entirety of your financial endeavors to be sure that what you’re investing in currently makes sense for you and your transition to a single income.
Reassess Your Budget
Transitioning to only one source of income will naturally mean that you’ll need to do some budget reassessment. From utilizing an app to creating a spreadsheet of your own spending, make sure you run the numbers on every single expense. To start, make a list of every source of income you currently have. Should you have to pay or should you be receiving child support or alimony, don’t forget to add or subtract this accordingly. Determine what money you may be saving now that you’re on your own, and disperse it wisely. While there are some subscriptions that might end up costing you more by yourself, there are sure to be other expenses that you can eliminate from your budget entirely. Lastly, take a hard look at your monthly costs that fluctuate. Whether this be how much you spend on groceries or the cost of getting your nails done, these should not be overlooked.
Target New Goals
Though it may be difficult at first, try to see things as a fresh start. Starting this new chapter of your life also means targeting new goals. Start making plans for where you want to be in the years to come. Are you hoping to start your own business? Do you want to make the transition on your own from apartment living to home ownership? While they can feel far off to some, envisioning such goals will help you to maintain confidence as you navigate a single lifestyle and give you a greater sense of purpose though things may feel uncertain. If you do have your heart set on a side hustle, do some research on how to afford one on a single income. You can also look to friends and family members who have already reached such goals on their own. Discuss with them their advice on how they were able to reach a milestone of owning a home or starting their own business. Most aspirations like these require some sort of outside funding. However, there are plenty of financial options to look into. Research affordable small business loans, or look into the prerequisites of FHA loans if you have your heart set on a certain house. Don’t set your aspirations aside just because of a solo source of income. There are still plenty of ways to reach your goals and maintain financial stability after divorce.
Hire a Professional
If budgeting on your own is not something you feel qualified to do, you can always hire a professional to organize your finances for you. In some cases, your spouse may have been the one who handled the majority of your expenses to begin with, leaving you to feel overwhelmed at the prospect of doing it on your own. Should this be the case, hiring a financial advisor is a great option for you to set yourself up for financial success in the future. Professional advisors will be able to help you get a better understanding of your retirement plan, outstanding loan balances, and any past or future investments you might need extra assistance going over. Don’t be afraid to ask for help should you need it, and discuss with your lawyer who they might recommend. They may already have established connections with the perfect financial planner for you.
Manage Your Credit
Lastly, having a plan of action to better manage your credit after your divorce is a must. Utilize free online platforms to determine where your score is currently at, and then develop a plan for increasing it accordingly. If your score is lower than anticipated, don’t get discouraged. It’s not uncommon for the financial setbacks of a divorce to negatively impact your credit. Tackle your credit one day at a time and set aside a specific amount each month to put toward any outstanding debt you may be currently dealing with. Taking the time to manage your credit first will better prepare you financially to tackle your goals and help you to be happy again after your divorce in all aspects of your life.
Tackling the process of finance management after a divorce is no easy task, so make sure you’re taking the time to be proud of your financial accomplishments. As you move toward this next chapter of your life, look for ways to find enjoyment in outlining a solo budget and setting new goals. While it might not be the easiest journey, having your finances in order for your future will allow you to focus on rebuilding your life exactly the way you envision it.