Divorce is all about separating ties and starting over. As soon as your divorce is finalized, you may start experiencing financial uncertainty. After a divorce, you may need to trim down spending and live within your means. Building a financial plan can help secure your future and give you peace of mind. Below are several important tips for people who are going through the pain of divorce and don’t know how to survive financially afterward:
Prepare a budget
Preparing your budget becomes even more important after a divorce. Based on your income sources, expense requirements, assets, and tax situation, prepare yourself for your financial needs. If you are confused about how to prepare a budget, you can find a reliable online tool or speak with a financial professional that can help you create a budget and track your spending. We provide can provide guidance in choosing an appropriate financial planner.
Separate emotions from financial decisions
It is important to know that marriage is about love, whereas divorce is (usually) about money. Divorce is undoubtedly one of the most stressful events in anyone’s life. While dealing with the emotional trauma, it may become difficult to make wise and logical financial decisions. It is important that you separate emotions from financial decisions.
Understand the tax implications of your assets
Not all assets are equal. $1,000 is one stock is not necessarily worth the same as $1,000 of another stock. Identify the tax implications of your assets, including any vacation homes, rental properties, or primary residences. Identify stocks, bonds, annuities and mutual funds and learn the difference between freely tradable brokerage accounts and restricted ones like IRAs, 401(k) plans and pension plans. You will be responsible for paying the taxes for any property you own, but the tax ramifications can be far different for each type of asset. You can get a referral to an experienced financial adviser from your family members or friends. A trusted financial adviser and an experienced Boca Raton divorce lawyer can help you handle your situation.
Keep your property settlement assets for emergency use
Always remember that property settlement assets can be additional sources of income. You need to understand how you can use them for emergencies, retirement, and long-term financial goals and how easily you can convert those assets into cash. You also need to understand how you can use some of these assets to generate new sources of income and revenue.
Close all your credit cards and joint accounts
It is important to close all your joint accounts as well as credit cards. This is because your ex-spouse could leave you open to debt and hurt your credit score. Divorce often causes lower credit scores so it is important that you close joint credit cards, get current on personal credit cards and plan how to improve your credit rating.
Surviving a divorce is a great challenge. It can be both emotionally and financially devastating. These tips will help you to survive financially after your divorce.