Managing finances following a divorce

12/1/2018

Getting a divorce can significantly change your financial situation, and once you are divorced, you’ll need to reassess your finances. After your divorce is final, it is wise to allow time to pass before making any major financial decisions. When you are ready, there are a few things you can do to move forward financially.

Determine necessary financial tasks

Get a firm grasp on your financial situation. Start out by requesting your free annual credit reports and review them for accuracy. Make sure that the accounts listed on the report are indeed your financial responsibility. Also, determine a procedure to pay bills, make deposits and withdrawals, get cash, and pay taxes. Using automated bill pay with your bank is the easiest way to make sure your bills are paid on time. This is probably a good time to make sure that you are doing all of your banking with the best bank for you. Review the convenience of the bank, as well as the fees and the benefits.

Locate important personal and financial documents

You will need to locate important papers such as tax returns, wills, insurance policies, birth certificates, mortgage documents and Social Security cards. You may also wish to update some of these documents based on your new situation. Store up-to-date documents in a safe location that’s easily accessible. Revisit each of your insurance plans, including health insurance, to make sure that you are appropriately covered in case of emergency.

Create a new spending plan and budget

Changed circumstances call for a new budget. Go through each of your expenses and decide how you can reduce each expense to reflect your new situation. It’s important that you work hard to reduce your expenses to be equal to or less than your income. Any extra income you find can be used for savings.

Set new personal financial goals

Most likely, your experience changed your financial priorities. Decide what you would like to do with your money and put a plan in place to make your goals a reality. Make sure that your goals are realistic and flexible or frustration will keep you from achieving them. Also, review your investment plans and types of accounts–any life change is a good time to make sure that you are on the right track.

Most importantly, enlist the help and support from your family, friends, and community.

Jesse Campbell is the Content Manager at MMI, with over ten years of experience creating valuable educational materials that help families through everyday and extraordinary financial challenges.

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