Managing Finances After Divorce

Managing Finances After Divorce

Filing for divorce and getting rid of a miserable, annoying, or useless partner can be freeing. You are now on your own. You have the freedom to do what you want without needing anyone else’s approval.

However, life after divorce is not all fun and games. Instead of two people living in one household, there are now two different households. Your partner will no longer contribute to your bills and household expenses. You are on your own financially. Have you taken this into consideration?

While managing finances after divorce is nobody’s idea of fun, it is something that needs to be done unless you are content living on the streets. Prepare for your new life after divorce and ease your financial stress with these helpful tips.

Update Your Budget

After a divorce, it is time for a budget overhaul. You will be responsible for all income and expenses, so how will you make it work? It is time to trim the fat. Do not watch much TV? Get rid of your cable TV. Buy Starbucks on your way to work every day? Time to start making coffee at home.

You will need to find ways to spend less. Take some time to outline all the things you spend your money on versus how much money you are making. Take into consideration any new expenses you may have after the divorce, such as alimony or child support. What expenses can you cut back on or eliminate altogether? Keep in mind that you may not be able to keep up with your previous standard of living for a while. Focus on what you need and not what you want. Be strong; money problems do not have to last forever.

Modify Your Goals and Priorities

Now that you are divorced and no longer have a partner to worry about, you should update your goals and priorities in life. Chances are, a lot of your future plans entailed your spouse’s interests. These are no longer your goals. Scrap out those plans you once made and start anew.

Think about what you want to do with your life. Do you want to go back to school? Are you looking at a new career field? What are your retirement plans? Do you want to stay where you are or move to another state or even another country? A divorce is a good time to re-evaluate your life. You can think about the costs of pursuing your new goals and how you plan to meet those goals.

Discover Options for Dealing With Debt

More than likely, you will be leaving your marriage with some debt, especially after paying your lawyer and splitting assets. Do not let this debt linger, as that will cause interest fees to accrue, pushing you further and further into debt. Find a way to get these debts paid down quickly so you can focus on saving up for the future.

Look at credit cards with special benefits, such as 0% balance transfer fees. You can transfer your credit card debt there and not have to pay interest for a limited time, as long as you pay off the balance in time. A personal loan can help you consolidate debts so you have a smaller payment each month. Borrowing from friends or family members may also be an option.

Build Credit

If you never had your own credit cards, now is the time to start building credit. You will likely want to buy a home or a car in the future, and having a good credit history is an important first step.

However, getting approved for a credit card is a Catch-22. You need credit in order to get credit. A good way to get around this is to apply for a secured credit card. You will need to make a deposit in order to secure the card. Once you start using the card and making payments on time, you will have a positive payment history, which is a part of your credit score.

Downsize Your Living Situation

You and your spouse lived comfortably in a three-bedroom while you were married, but do you really need that much space now? Most likely, no. You may be tempted to stay in the marital home for memories’ sake, but is it worth the expense?

Houses are expensive to maintain. There is the monthly mortgage payment, insurance, HOAs, utilities and other costs that add up. A small apartment would be a better choice, at least for the time being. You will pay less in rent, plus you will have a landlord who can maintain the rental. You will not have to worry about finding a handyman if you have a leak or some other repair situation.

Make More Money

In a post-divorce situation, having more money is always good. You can take care of bills, pay down debt and maybe even save a little for the future. To get more money, though, you have to work more. Even if you are already working full-time, a side job might be a necessity for a while. Many people work several jobs. It may not be desirable, but any boost in income will be beneficial during this time.

Seek Legal Help

Divorce is a huge event that will affect many aspects of your life for many years. Your finances will no doubt take a huge hit and may never be the same.

This can be devastating to those who have worked their entire lives, only to be left with fewer assets in a divorce. Unfortunately, this is a common reality. Palm Beach divorce attorney Scott J. Stadler can help you prepare for life after divorce. By making some changes, you can thrive after ending your marriage. To schedule a consultation, call (954) 346-6464.