Divorce will hit your finances hard. To reduce the chance that you emerge from divorce struggling to make ends meet, you need to plan your finances beforehand.
Making time to think calmly about financial matters is not easy at the best of times. It will be even more challenging in the turmoil of a divorce. If you are the one filing, you can give yourself a head start by thinking about finances before you announce your decision to your spouse. If your spouse surprises you with a divorce request, it may be more difficult.
Here are some aspects of your finances to consider
Whether you do it on your own or you work with a financial advisor, here are the things you should start to think about:
- Asset division: Getting help to understand how the state requires you to divide assets is crucial to understanding the money you will have to work with afterward.
- Earning ability: If you are currently working in your chosen career, you will have a clear idea of your future earning potential. If, however, you’re working part-time or not at all, you may need to add the costs required to retrain in a more profitable line of work.
- Money for the long term: If you divorce young, you have an abundance of time to prepare for retirement. If you are older getting this right now is more crucial. Do not bank on staying in good health either. You need to consider future medical costs and the cost of living when no longer working.
- Interim costs: Thinking about the future is essential, and so is having enough to survive the present. You need to factor in legal fees and any extra accommodation or childcare fees the divorce may cause you.
If you find there’s too much to focus on right now, remember you can get experienced help to ease the divorce process.