Contributed by Eileen Stoner of The Stoner Group
Divorce or separation is not only challenging emotionally for you and your family, but it can also impact many key areas of your financial life, including being able to maintain your lifestyle and pursue your long-term goals. Below are some important ideas and strategies that can help you successfully manage your financial life during this challenging time.
Consider creating or revisit your financial plan.
Starting over provides an ideal opportunity to reevaluate your cash flow, retirement goals, education funding, and insurance needs. You can also review your current investment portfolio, asset allocation, asset preservation, and estate planning strategies. This process can help in the creation of a strategy to help you meet your most important short-term and long-term financial goals.
Adapt to Change.
Maybe one spouse stayed home with the children and is returning to work as a result of divorce. Often, the income that supported one household must now support two. To make a smart spending plan, consider completing a budget worksheet that outlines your major expenses, such as housing, insurance, food, utilities, transportation, and clothing.
If you and your spouse jointly own one or more homes, the future of those assets may be uncertain. You may both decide to sell the houses or maybe make them a part of your divorce settlement. Either way, don’t let mortgage and tax payments lapse, and make sure to fit real estate expenses into your overall budget.
For auto and life insurance coverage, consider reducing premiums by raising deductibles or dropping coverage you don’t need. You can rethink any of these strategies when your post-divorce financial picture becomes clearer.
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