//Tips for Recovering Financially After Divorce

Tips for Recovering Financially After Divorce

If
life was a fairy tale, every marriage would last ‘until death’. Couples would
spend their lives sharing not only love but co-depending on all matters including
finances. Unfortunately, reality is sometimes not kind and some marriages end
up in divorce.

This
new phase leaves some spouses unscathed while others are left with massive
debts, new financial responsibilities or lack of enough knowhow on how to manage
personal finances. Finding your way back to financial freedom is not easy; it
takes time and dedication. To put you in the right path, here are five tips for
recovering financially after divorce. 

Repairing Finances After Divorce

#1 Start by Dealing with Your Emotions

Divorce
comes with grief and anger from the lost love, emotional support, shared dreams
and so on. This has a draining affect on your quality of life and spiraling
into depression is a common occurrence.

If
the depression goes unchecked, you risk falling into irrational behavior like going
off budget leading to more financial ruin; to avert this, seek counseling. This
could be from a therapist, joining a support group or even opening up to a
trusted family member or a religious leader.  

#2 Create a Plan

Now
that your assets have been split, you have to take care of all financial obligations
that come with your share. List every asset and debt to know exactly what you
are dealing with. This will help you in coming up with a detailed expenditure plan
that addresses your income against debt repayments and future goals.

Identifying your financial limits will also come handy in ensuring that your expectations are realistic and achievable. Create a formal plan, complete with an investment program that takes current income into account and one that is tailored to help you meet your set goals.

#3 Check your Credit

During
the marriage, your credit score may not have mattered, especially if your
spouse was the sole breadwinner and paying off bills never concerned you. Being
alone means your creditworthiness will now come into play; you have to know
your credit score which will greatly affect this.

A low score may result to adjustments on mortgage payments, difficulty in getting a job or even an apartment. Immediately after the divorce is finalized or better still during the proceedings, check and start improving your credit score.

#4 Increase your Savings and Income

Divorce
may call for cutting back on your expenses or a complete lifestyle downgrade. That
said, being divorced should not mean being miserable. If you are unemployed,
start looking for a job to supplement your alimony check. You can also look for
a second job, if you already have one, to increase your current earnings.

A
successful financial rebound is pegged on the size of your savings. With meager
savings, you may be forced to over rely on credit cards and personal loans to
maintain your lifestyle. This can be avoided by adopting a savings plan; stow away
as much money as your income allows, this will shelter you during emergencies
or unexpected expenditures.  

#5 Seek Expert Advice

Securing
your finances is not an easy task even for the rich or staunch savers. This is
where the services of financial advisors come in: They guide you in completely separating
your finances from those of your ex and making sustainable plans for the
future. 

You will receive expert advice on how to; close joint accounts, transfer house and other asset deeds to your name, update beneficiary information on your will and insurance, balance your accounts, prioritize savings, file taxes and how to go about any other money related task that your ex used to handle.

Bottom Line Divorce is stressful, but the pitfalls can be reduced by adopting ways to keep your finances healthy. These five steps will not change your financial situation overnight but are a good place to start. In a nutshell you should start by accepting your situation and dealing with the emotional turmoil. Once your mind is in the right place, come up with a plan on how to increase savings and income, and improve credit score. Lastly, don’t shy away from engaging an expert to help you in making divorce settlement less complicated and guiding you through your financial projections.    

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