The emotional pain of divorce is often heartbreaking, as can the struggle to build an independent life that’s completely separate from the one you knew for so long. In addition to emotional turmoil, divorce is also expensive, and certainly a factor in financial disasters. But life after divorce must go on and so must your drive to gain financial security.
Divorce is particularly tough for single income families. If one spouse gave up a career and subsequent income, the struggle to “get by” with additional financial obligations is especially challenging. Examples of such obligations include the cost of raising children, maintaining a home, and occasionally alimony. So how do you pick yourself up, dust yourself off and get back on your financial feet following a divorce? Life after divorce goes on with these ideas that help:
After the Divorce
Unexpected bills don’t make anyone happy, and while the divorce might not be a surprise, you’ll still need to be aware of immediate financial responsibilities, such as finding a new short-term residence for you, children and pets while looking for long-term accommodations. It’s also important to remember the possibility of large legal fees for the actual divorce.
Putting yourself in debt is hardly an ideal scenario, however now is a good time to consider a loan or overdraft facility. Remember that if you do choose one of these options, it’s essential to meticulously work out your budget so you can repay the outstanding amount as quickly as you can.
Your spouse’s attorney or a court-appointed official will be going through your finances very, very carefully, and hiding assets is never recommended. Ever. Divorce laws vary a heck of a lot by state, and while you don’t want your ex to receive more than necessary, taking a financial (and possibly emotional) hit is going to occur. This is due to the selling of joint possessions and properties, depending on your divorce terms.
Another form of divorce that’s way less messy than legal brawling is the collaborative divorce. Parties divide their assets with the help of legal and financial advice, but minus the litigation and court deciding which funds go where.
Collaborative divorce may result in a new financial obligation, though usually for the person with more moo-lah, as said person might be advised to pay the ex more than they first thought. So how to fund such a settlement if needed?
Funding the Divorce, Life After Divorce
To pay what was stipulated in the divorce, liquidating stocks and shares might be necessary, even if the market says otherwise. A broker can help you through this, and will work to get you the best deal, whatever the commission.
If possible, keep your 401K or other forms of retirement savings out of it, especially since such funds are often extremely difficult to replenish. For example, if funding a $50,000 withdrawal and you’re in your mid-30s, you’ll have to allocate an extra 1% of your salary annually to replace what’s missing. The older you get, the more that sum goes up.
Getting back to where you want to be financially post-divorce is simply about control. Yes, it can be very difficult to make it, particularly for women who have primary custody of children and might need to find a job. It’s really about careful budgeting and taking reduced assets and income into account. Getting back on your financial feet may take years, but it will happen!