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How to start over financially after a divorce

How to start over financially after a divorce

Starting over financially after a divorce can feel overwhelming on many levels. If you have recently been divorced, you might still be handling the legal bills related to your divorce. Moreover, you are most likely trying to manage your expenses on a lower income than what you are used to while only seeing half your assets when you open your investment statements. Here are some expert tips to help you reclaim your financial independence after a divorce.

How to Start Over Financially After Divorce

Divorce can have a substantial impact on your finances. Unfortunately, coping with money issues post-divorce can be challenging as you try to rebuild your life. If you have been left struggling financially because of your divorce, it is vital that you be as proactive as possible. A few steps you should consider taking immediately to get back on track financially include adjusting your spending to your new budget; making a plan to deal with any outstanding debts the divorce has left you with; considering how the divorce will affect your taxes and health insurance; and setting new financial goals. You might also need to work on building credit in your own name if you share any joint accounts with your spouse.

Review Your Finances

Going through a divorce can be very emotional and stressful, so it is easy to lose sight of the financial ramifications of that result. The first step to getting a grip on your finances following the divorce should be to evaluate your living expenses, any outstanding debts you may have, as well as your income, including any alimony or child support. Laying out your monthly bills, including your bank and credit card statements, can help you identify any potential spending habits that may need to be corrected, as well as payments you can put on auto payment. You may experience a significant reduction in household income, which may require you to make some adjustments to your spending.

Create a New Budget

Use the divorce process as a reset button on your life; since you are laying everything out there anyhow, this is the best time for you to examine your saving and spending habits. Seek professional advice if you need to, but use this as an opportunity to start over and change your habits. Creating a spreadsheet can help you budget. Create a spreadsheet of the bills you have and when they are due, and use that to keep track of what you need to pay each time you get paid. Keep track of your expenses and try not to live above your means. Only do things if you can afford them—even if that means you need to live on PB&J for a little while.

Keep Track of Your Documentation

If you decide to apply for a new home loan after your divorce, you will need your divorce decree. It is essential to keep any documents related to your divorce for your financial records, including tax returns, mortgage documents, bank statements, and any other financial records. Make copies of all these financial records in case you need them further down the road.

Once you get some time as a single person under your belt, you can upgrade your standards later. The point is to ensure you are not living right up to the edge of what you make. If you are, it can make for a somewhat nerve-wracking life. With some planning, you might be able to reduce your expenses and still live a financially comfortable life. Rebuilding your financial life after your marriage has ended may seem daunting, but it is doable. Just follow these key steps, and before you know it, you will be in a much better place with your money, and you will have a brighter future to look forward to.

For help choosing and completing the divorce forms you need, contact Split Easy today.