Even if you got the best settlement you could have reasonably hoped for in your divorce, going from a two-income household to a one-income one is financially stressful. A study conducted by TD Ameritrade of 2,000 people who’d lost a spouse to divorce or death found that three-fourths were financially insecure. Half expressed concern about being able to afford to retire.
In most cases, people’s standard of living will change. It’s important to accept that your standard of living will likely change, and then start planning for your new life. This may involve re-entering the job market, if you’ve been out of it for awhile, or postponing your retirement.
It’s essential to get control of your finances as soon as possible and to have a plan for how to live on your new income. It may be wise to seek professional financial advice while you’re still going through the divorce from someone who specializes in helping divorcing people. This can help you determine how much money you need to live on, what assets you can afford to keep and which you’re better off selling and what kind of settlement you should seek.
Making a budget is key. Housing is probably going to be your largest expense, even if you downsize to a smaller home or apartment. Remember that you’re also going to be paying for utilities and other monthly expenses associated with being a homeowner or renter.
Make a list of all necessary expenses. Don’t forget things like health insurance premiums, which you may never have had to pay if you were covered under your spouse’s plan. Then determine what nonnecessities you can still afford and which you need to cut back on or give up.
Don’t give up on saving. It’s more important than ever to have an emergency fund if you have unexpected expenses or lose your job. A good way to save money without thinking about it is to have part of your paycheck automatically go into a savings account. You may also want to increase your 401(k) plan deductions to build your retirement fund.
If you weren’t the one in the marriage who handled the finances, this can all seem daunting. Your Arizona family law attorney likely knows one or more financial advisors in your area whom you can consult. These professionals can help you prevent the financial insecurity that too many people feel after divorce.
Source: Wise Bread, “How to Build Financial Stability After Divorce,” Toni Husbands, Feb. 20, 2018