Five Strategies For Rebuilding Your Finances After Divorce
Transitioning to post-divorce life can be difficult, with the parties involved often required to find a new place to live and adjust their finances, all while grappling with the emotional aspects of ending a marriage. Managing their finances may be the last thing that a couple wants to do following a divorce, but doing so is critical to protecting their financial future. Here are five tips for helping you rebuild your finances after a Florida divorce.
Evaluating Your Financial Situation
One of the first things you’ll want to do following divorce is to assess your financial situation. This will likely involve making a list of your:
- Assets;
- Debts;
- Expenses; and
- Sources of income.
Thoroughly breaking down these categories can give you a better understanding of where you stand financially, which in turn is critical to helping you make informed decisions. This foundational step will go a long way towards enabling your financial recovery after divorce.
Creating a Budget
Once you’ve gone through your assets, debts, expenses, and income, you’ll want to develop a budget that reflects the reality of your new financial situation. Be sure to take note of all of your expenses, giving priority to essential costs, like housing, utilities, food, and clothing. By creating a budget, you can track your spending, make sure that your income is enough to cover your expenses, and help you identify areas where you can save money.
Creating an Emergency Fund
It’s also a good idea, while creating a budget after your divorce, to think about building an emergency fund that can act as a safety net in the event of an unexpected expense or job loss. You should try to save enough to cover between three and six months of living expenses, like rent and utilities. It’s okay to start small when saving and to gradually increase the amount over time.
Repaying Your Debts
Many couples exit their marriages with debts that they still need to repay. By making a plan to pay off these amounts, recently divorced couples can lower their financial stresses and improve their credit scores. Try to prioritize your high interest debts first, like credit card payments and consider consolidating your loans to help simplify repayment. Making regular payments can help lower what you owe and in the end, assist you in regaining control of your financial situation.
Making a List of Your Financial Goals
Finally, divorced couples should try to make a list of their financial goals for the future. This could include everything from saving a certain amount over a specific period of time and focusing on a retirement account to purchasing a home or expanding an investment portfolio. Whatever the goal, having a clear objective in mind can help couples stay motivated and financially on track.
Experienced Fort Lauderdale Divorce Lawyer
If you have concerns about how your divorce settlement will set you up financially for the future, please call experienced Florida divorce lawyer Sandra Bonfiglio, P.A. for an evaluation of your case.
Sources:
nytimes.com/2023/05/13/business/divorce-retirement-savings-planning.html
forbes.com/advisor/banking/emergency-fund-calculator/
