It’s no secret that divorce can be the most tumultuous time in a woman’s life. Unfortunately, divorce can also trigger financial upheaval, too. A woman’s household income often tumbles more than 40% after a divorce and divorcees are at a much higher risk of falling below the poverty line.
Many of my clients feel overwhelmed by their changed circumstances. They might have to move or adjust to a different lifestyle. Making the right financial decisions can streamline this transition and protect your future.
Here are my top financial tips for clients going through a divorce:
Listen to the Experts
During a divorce, you can expect to receive a lot of advice. Your friends, family members, and coworkers may decide to weigh in. Keep in mind that these individuals don’t have a deep understanding of your legal and financial situation. Their intentions might be good, but their advice is probably useless.
It’s so important to build a team of experts for guidance and support as you go through this transition. Your attorney can provide personalized guidance that addresses your unique situation. A financial consultant can also offer individualized support.
Understand Your Budget
Many clients become overwhelmed as they try to take charge of their finances. Often, these clients had spouses who handled everything. They aren’t used to making solo financial decisions.
Creating a budget is crucial. If you don’t manage your money, it will manage you. A budget includes items such as housing costs, insurance premiums, food, utilities, transportation, and more. Your financial consultant can guide you through the process of building a budget and can help you determine your cash flow for each month.
Avoid Making Major Financial Decisions
During a divorce, emotions run high. Many people impulsively decide to sell off assets or make large purchases. Sometimes, clients want to ‘punish’ their spouse by draining joint accounts. Others decide to lock their spouses out of accounts or run up frivolous credit card bills.
Acts of revenge can provide temporary satisfaction, but can backfire and may affect asset divisions, spousal support, and much more. You are accountable for the decisions you make during a divorce. Judges don’t like it when individuals ‘take revenge’ against their spouse.
Be Smart and Frugal
There’s no doubt about it: divorce is expensive. The aftermath of a divorce can be costly, too. It is so important to chart a new financial course for yourself once the dust settles after divorce. Do not allow yourself to get “stuck”. Working with a financial coach can help you keep the momentum and keep you accountable to new goals you make for yourself.
Keep Track of Credit Reports
During and post-divorce, I tell clients to check their credit reports often. Make sure that any debts or obligations are being met. Check to see if any new loans have been taken out in your name or your children’s names. Your credit report provides valuable documentation about marital assets. Make sure to notify your attorney or financial consultant if you notice any surprising changes.
About Swan Financial
If you’re grappling with divorce, widowhood or a life transition that has affected you financially, we are here to help you. I have been able to help hundreds of individuals manage their toughest seasons victoriously.
As a Transformational Wealth Coach and through my “Smart Money Gal,” platform, I help women find their financial confidence, reclaim their power, and embrace a life of prosperity. I offer transformative programs and private sessions, that will help you take control of your life and money.
My team is here to support and encourage you as you move forward on to a new, bright financial future.