Once you’ve finalized your divorce, finances often become a much bigger part of your life. You may have been in a partnership in which financial duties like budgeting and bill paying fell to your spouse. Or you may have maintained control of your joint finances but now feel overwhelmed by your increased responsibility as a divorced parent. Bottom line, divorce most often has a much larger financial impact on women, and there are things you need to know.
Top 10 Tips For Women on Finances and Divorce
Whatever it is you’re dealing with, relax. Take a deep breath and consider these ten tips on women, finance, and divorce:
1. The cost of living. Now, more than ever, you need to know how much it will cost for you and your children to live. It may seem intimidating, and you might have never done it before – but it’s time. And you start by making a list. Be sure you include everything from your mortgage and insurance to birthday parties and holiday gifts. Once you have a list of expenses, divide them by month so that you’ll have an accurate cost of living.
2. Be realistic about support. Depending on what you’ve negotiated with your ex-spouse, child support and alimony probably won’t cover every expense. And it’s not intended to. This is where your monthly budget comes in handy – you’ll know if you need any supplemental income and, if so, how much. Then you can start figuring out a plan to make that happen.
3. Ensure childcare. Make sure that your children are cared for in the event of an emergency. To ensure you’re protected, if you don’t already have life and medical insurance on your list of expenses, you might think about adding them. Married couples often use one spouse’s medical insurance to cover the family, so you may need to spend some time researching and pricing your various options to find the best fit.
4. Budget breakdown. I’ve already mentioned the importance of cataloguing your expenses and dividing them by month. Creating a comprehensive budget won’t only ensure that you have the funds you need to care for you and your family, but will also serve as a valuable planning tool. Some months will likely require more money than others, such as those around the holidays. By creating and adhering to a monthly budget, you’ll be able to prepare for higher costs and avoid feeling cash-strapped or stressed (because, seriously – don’t we all have enough stress in our lives?)
5. Financial maintenance. If you haven’t previously been in control of your finances, put on your big girl panties and get ready. It’s not all that difficult. And it’s uber critical. Learn how to take care of your bills, set up bank accounts, apply for credit cards and improve your credit rating, if applicable. Most bill payers now offer electronic and automatic payment options, so consider signing up for these so that payments will automatically be deducted and you won’t have to worry about late or missed payments. In no time at all, you might be surprised by not only how easy it is, but how capable you are if this is something you’re not accustomed to dealing with on your own.
6. It’s all you. One of the most important tips to embrace is that once you’re divorced your financial livelihood depends on you. No one else will monitor your bills, keep track of a budget and make sure you have the money you need to cover your expenses. It may seem overwhelming at first, but there’s also lots of independence and satisfaction that results from knowing you’re the one in charge of your finances and are taking care of yourself and your family.
7. Plan for the future. It’s imperative to make sure your family is financially cared for in the immediate future, yet you also want to be sure you’re thinking about the future. If you don’t already have a savings plan in place, start one! This is especially important if you’re anticipating helping kids with college. You’ll want to be sure you’re covered, too, so look into a 401(k), Roth IRA or other long-term savings program that will help ensure you can provide for yourself during retirement. It can never hurt to make time to sit down with a financial advisor to discuss your concerns and options. And you’d be surprised how much better you feel about the path you’re on once you make an effort to do that. Getting started is the first step.
8. Credit clean-up: If your ex-spouse had some nasty financial habits, they might have wreaked havoc on your hard-earned credit. Pull your credit reports from a site like annualcreditreport.com (you’re entitled to one free credit report each year). Check for any errors and to see if any joint accounts have negatively affected your score. If you need to rebuild, consider applying for a credit card, using it and paying it off monthly. This will create a positive payment history and, over time, will help you overcome negative activity. Also, make sure you stay up-to-date on things like car and house payments; these can also affect your credit score.
9. Financial housekeeping: Review all of your accounts, car titles, insurance documents and other pertinent paperwork to see if your spouse is listed. You’ll probably want to remove his name and ensure that all documents are in your name. Also, review any payable upon death instructions to make sure that payments will be directed to the correct source. If you don’t already have a will, get with an attorney and have one prepared. And, if you already have one, check it over and make sure it reflects your current wishes.
10. Be prepared: Although you may be expecting child support or alimony, it’s best to plan for a situation in which those payments are delayed or don’t appear (it happens all too regularly, unfortunately). This way, you’re armed with a financial back-up plan. It’s certainly not fair to you, but the sad reality is that this sort of scenario frequently occurs, and it’s up to you to make sure you and your children have the money you need to cover expenses and necessary needs.
Divorce is rarely fun but hang in there, because although things may seem bleak at the beginning, they do get better. And if you can be smart, follow the above advice and ensure that your financial house is in order, life will be infinitely better.
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