Financial Planning After Going Through a Divorce
Going through a divorce can be one of the most difficult and emotionally draining experiences that anyone has to go through. It can also have long-lasting financial implications that make it hard to get back on track. There are some steps you can take, however, to ensure that your financial situation is as secure as possible going forward. Here are a few tips when it comes to financial planning after a divorce.
One of the first steps in any sound financial plan is developing a budget. This will give you an idea of how much money is coming in and where it’s going out each month. Start by tracking all of your expenses for two or three months so you can get an accurate picture of where your money is going and what areas need more attention than others. From there, create a budget that gives you realistic guidelines for spending and saving based on your income and goals.
When going through a divorce, it’s important to think about the future and how the decisions being made now will affect different milestones further down the line. This includes retirement savings plans such as 401(k)s or IRAs that were established during the marriage — do not forget about them! Depending on the terms of your divorce settlement, part or all of these funds may be transferred from one spouse to another, so be sure to investigate what options are available before finalizing an agreement.
The breakup of a marriage can have serious consequences on both spouses’ credit scores due to shared assets being divided or liabilities no longer being taken care of by one partner. Take control of this situation by getting copies of both your credit reports and scores from annualcreditreport.com — this way you’ll be able to see exactly how the divorce will affect both parties’ abilities to borrow money in the future. If you find yourself with lower scores than before, work with creditors directly to try and improve them over time with timely payments and responsible management of debt obligations.
Depending on your personal situation, professional guidance may be needed when managing finances during and after a divorce settlement — especially if large amounts of money are involved or other complex issues arise related to investments or taxes, etc.. An accountant or even a Decatur divorce lawyer may be able to provide invaluable advice about negotiations between accounts and other legalities down the road should questions come up regarding original arrangements laid out in court documents at some point later in life.