A divorce can be financially devastating, but rebuilding your wealth after a divorce is very possible.Because you may have been dependent on two incomes and bills for your entire household, learning how to two manage your money with one less person to support can be a little confusing. However if you learn to establish a budget, assess your current financial situation, reevaluate and prioritize your financial goals it can be a lot easier to understand.
The first step to financial planning is to review your financials and expenses. You should look at your income sources, your common expenses, which assets now belong solely to you, and your new tax situation. Although every divorce differs, it’s harder and more expensive to maintain two households instead of one. If you are paying child support as well as alimony while you are supporting your own household, your expenses will obviously go up. However, if your partner was working as well and you split the assets down the middle, then you only have your household to worry about. A good start is to review the past year’s credit card and bank statements. You can summarize an expense category and list separate expenses for you, your former partner, and your children if you have any. Once you have made this list you will have a better idea of what you can afford, and can allocate the money to new things. If you were awarded the house, consider downsizing to save money. You will have one less person living with you, so there is no need for extra space.
Insurance coverage for both spouses is usually negotiated as part of the divorce settlement. Because spouses usually that share the same insurance plan, you should make having health insurance coverage a priority after your divorce. Also, now that you are single you will want to make sure that your life insurance coverage and disability coincides with your current state. You’ll need to change your beneficiary designations on any retirement accounts and bank accounts that you have in your name. Some divorce settlements may require you to keep your ex as a beneficiary on a policy, in which you cannot change the beneficiary designation. Updating your will maybe a good idea now as well. This will help you to manage and protect your wealth after a divorce.
Contact an Attorney
If you are confused about the limitations of your divorce settlement or how to manage your current wealth, contact a divorce attorney such as the Divorce Lawyer Phoenix AZ locals trust for further assistance.
Thanks to our authors at Hildebrand Law for their insight into Family and Divorce Law.