Financial Tips When Facing A Divorce
Facing a divorce is difficult. Not only do you have to deal with the internal turmoil going on within yourself, you would also have to face family that have so many questions for you and even the kids, who are a loss with what is happening with their beloved parents. While dealing with the emotional stress and the people around you, as well as the pain of losing a life partner, there is one more thing that easily slips someone’s mind when they’re at the point of divorce and that is the financial side of things.
Your finances after a divorce will be a different landscape altogether. You will need to remember that you don’t have someone else investing or financially planning along with you, so every financial decision is subject to your discretion. However, at such a stage in life, you would be lost on how to even start re-calibrating your finances, which is where we come in, with our tips on how to run finances in the midst of a divorce.
Tips To Check Your Finances After A Divorce
#1 Evaluate Accounts
Re-evaluate all your financial accounts, whether joint or personal and even take note of all your loans linked to these accounts. Having banking accounts and investments that worked when you were together does not mean that it will work the same way, now that you are apart. Understand all the accounts that you have, the fees that they may incur and also the interest rates. Being on your own financially, you may need to opt for an account with lesser or no fee and possibly even offer a slightly higher return rate for your savings account.
#2 Revamp Your Budget
There will most definitely be a huge shift in the way that you do your budgeting now, as all the expenses will be your responsibility. Identify any costs that you’ve had that is solely your spouse’s and cut that out. Also, list out all your source of income, from your job to your alimony and child support, even bonuses or any additional jobs that you may take on. Once you have that, draw that up against your spending, whether it’s for basic necessities, like food and rent or if you need to spend it on the kids, for school fees or uniforms and such. This would give you a good idea of how thing will be, kind of like a personal profit and loss sheet.
#3 Talk To A Professional
You can’t always do things alone and finance is usually one of those things. Seek out a good financial planner to help you understand your current financial standing. With their help, you would be able to identify the unnecessary costs that you’re incurring as a result of joint investment, accounts and even purchases and you can easily cut them out to keep your money from flowing out unnecessarily. They’ll also be able to advise on taxes and your asset management, so that all this finance talk doesn’t leave your head reeling.
#4 Create An Emergency Fund
As with everything else, you will always need an emergency fund. You will never know what may come and having only part of the income that you used to have, you may want to save now for the rainy day. Put aside a small amount of money into a separate bank account and keep a strong resolve to only use it when in dire need. The interest on it will keep running for as long as there is a balance so you will get a certain amount of interest a year. If you aren’t too keen in the low interest rates, you can always invest in a short term bond, which would yield around 2%-3% per annum.
These are just some of the tips that you can use after you’ve filed for a split. Definitely talk to a financial planner, re-visit all your options of income and also the costs that you will incur and they would be able to draw up a financial plan for you. But, do be aware of some fake financial planners who are just out to gain access to your assets and bank balance for their shady agendas. If you find a fishy email from a so-called “financial planner”, run it by our email lookup system and you’d be able to uncover the real identity of the person.
Disclaimer:
The above is intended for informational purposes only and does not constitute a legal advice or specific recommendations in any way.
