An old adage says: “Happy families are all alike; every unhappy family is unhappy in its own way.” What follows from this statement is that the reasons to end a marriage vary from couple to couple. However, what is similar for most people who go through a legal dissolution of their relationship is the challenge – and often a struggle – to adjust to “the new normal,” that is, life after a divorce.
One of the more challenging aspects of a post-divorce reality is how to successfully maneuver a new set of financial circumstances. For example, data shows that in the U.S., divorced individuals earn on average $9,800 less than married individuals. Additionally, only 25% of divorced people feel financially secure (compared to 43% of married Americans) and just 3 out of every 10 divorced Americans say they expect to be financially secure after retirement. Still, even though a divorce can have such a dramatic impact on one’s finances, a large number of Americans are poorly prepared to tackle the financial challenges of life after their marriage has ended. Therefore, in this blog, we will consider 5 practical ways to financially prepare for divorce.
Start Saving Money Now
The financial challenges related to a divorce start long before the divorce papers are signed and the marriage is officially terminated. Divorce can be costly and you have to be prepared for the expenses related to the legal assistance you will most likely require. It is also important to remember that adjusting your budget to a single-income situation may take time and it would be wise if you had some money stacked up for emergencies. Saving funds before a divorce may help you ensure that you will have money to pay your bills in the first months of your post-divorce life.
Get a Separate Account
Getting a separate bank account will help you start saving as you will be able to transfer part of your salary directly to this account. Additionally, you should also close any joint credit cards or remove the name of your spouse from them. If you have money in a joint bank account, you may consider splitting it and closing the account.
Gather and Keep Financial Records
The division of assets – as well as financial obligations – can be one of the more contentious aspects of a divorce. That’s why you need to start documenting your marriage finances. You should also make copies of important financial documents such as bank and credit card statements, tax returns, ledgers for loans, pay stubs, and others. It is important to store such documents in a safe place.
Start Thinking About a Budget
If your spouse usually makes financial decisions, pays the bills, and takes care of the household budget, it may be difficult for you to adequately manage your finances after divorce. In order to prepare yourself for that, start tracking your family expenses and try making a mock budget that will include your own projected income and costs of living. Take into consideration bills, food, clothing, entertainment, transportation, and all your other expenses.
Prepare for a Major Lifestyle Change
As mentioned above, divorced Americans tend to earn on average almost $10,000 less than married individuals. This means that some lifestyle changes related to living on a tighter budget may be inevitable. Maybe you will have to become more conservative with your spending. Maybe you will need to move to a smaller living space. Some other sacrifices to your current lifestyle may be called for as well. In order to be able to maneuver this new situation without getting into debt, it may be practical to enlist the assistance of a professional financial adviser.
Obtain Trustworthy Legal Advice in Divorce Matters
It is extremely difficult to prepare for every possible aspect of a divorce and life after it. It’s important that you get your advice from a trustworthy source, especially since the legal process leading to the termination of marriage can often be confusing and frustrating. Rotella & Hernandez are family law attorneys who have helped hundreds of individuals arrive safely on the other side of a divorce. Call us today to schedule a consultation with one of our lawyers and experience the compassionate guidance you deserve in these challenging moments.