Staying Afloat Through Divorce
My divorce was out of nowhere. One day I was happily sticking my head in the sand about all things money-related, and the next I was completely on my own. I had to figure out how to re-set up the internet, get utilities in my name, pay bills, create a budget… and there was no one next to me to help carry the burden.
I’m not alone in that experience. As I’m sure you know, 50% of marriages end in divorce. No one stands in front of their friends and family saying “I do” expects for their marriage to end, which is why it is such a mind-numbing and life-altering event. While divorce affects individuals differently, statistical data has shown that women tend to experience a 20% decline in income and standard of living, along with a 27% increase in the risk of poverty. On the other hand, men typically experience an average 30% increase in household income and standard of living. That’s not to say men can’t be negatively impacted by divorce, but in general women are more negatively affected. However, there are some strategies you can keep in mind after the possibility of divorce seems more sure that will increase your chances of financial success after a divorce.
Establish Separate Bank Accounts: As soon as you become aware of the impending divorce, open separate bank accounts. This separation of finances will help maintain clarity and transparency in managing your own income, expenses, and savings. Having individual control over your finances will empower you to make decisions aligned with your financial goals and priorities.
Open New Credit Cards: Apart from separating your existing joint accounts, consider opening new credit cards solely in your name. This step will ensure that you can build a strong individual credit history and maintain financial independence. Managing your own accounts will also provide you with a clear financial picture and allow you to plan for the future more effectively.
Update Beneficiary Information: Review and update the beneficiary information on your investment and retirement accounts, wills, and life insurance policies. This is a crucial step to ensure that your assets are allocated according to your wishes. Updating these details will help safeguard your financial legacy and provide for your loved ones in the event of unforeseen circumstances.
Seek Professional Guidance: During the divorce process, it is highly recommended to consult with a financial consultant or a divorce financial specialist. These professionals can provide valuable insights into the financial implications of divorce, helping you make informed decisions and establish a solid financial plan for the future. They can assist with understanding complex financial matters, such as dividing assets, negotiating alimony or child support, and planning for retirement.
Divorce is already an incredibly emotionally taxing event, without adding on all the stress of finances and establishing your independence. Don’t wait until it’s over to start making moves financially. Get started ASAP so that you can get back on your feet.
