Even if your divorce is relatively amicable, you will probably experience a significant shift in your finances. For many people, the change in financial status is one of the most traumatic aspects of divorce. It is definitely disheartening to learn that everything you have worked for will now be divvied up between you and your former spouse.
You can rebuild your financial situation after divorce, provided you take the right steps. Entrepreneur offers the following tips to get back on track financially after your divorce has been finalized.
Determine where you stand
Start by surveying your post-divorce financials. Make a note of your current income, debt, living expenses, assets, and liabilities. Take this information and feed it into a spreadsheet or financial software so it can be conveniently tracked in the weeks and months going forward. This will give you an idea of where you stand and whether you have a sufficient amount of money to move forward.
Make sure your budget is balanced
Once you know where you stand, make sure you are not overspending. Cut unnecessary expenses, such as entertainment, if you are struggling to make ends meet. You can also cut back on non-essential spending in order to save a bit more money. Saving should be built into your monthly expenses, which ensures you have a safety net in case an unexpected situation arises.
Get financial accounts into order
If you have life insurance policies or retirement accounts, be sure to update them after your divorce has been finalized. For example, updating beneficiary designations ensure the proceeds from these accounts go to the right heir, and not to your ex or their family. You may also need to close joint accounts and re-open individual accounts in your name if you are unable to have your ex’s name removed.