With divorce having an average cost of $12,900, it’s no wonder that so many are struggling financially after divorce. Where your divorce takes place, whether or not it goes to trial, attorney expenses, property division, and other legal fees will all factor into the cost of your divorce. Yet, financial struggles don’t end with divorce proceedings.
Starting over financially after a divorce can be a challenging experience. If you and your former spouse both had an income, the loss of the other income source might create financial difficulty for you. Furthermore, these difficulties may be compounded if you are ordered to pay child support or alimony.
Child support payments average about $5,760 per year and are based upon state guidelines, parental income, and your child’s needs. While alimony is less common, these payments are designed to temporarily assist the spouse with less earning power after a lengthier marriage. The burden of alimony on one spouse will depend on the financial disparity between both.
5 Tips When Starting Over Financially After Divorce
Are you starting over financially after divorce? Here are five tips that can help prevent you from struggling financially after divorce:
1. Evaluate Your Income and Expenses
If you are starting over financially after divorce, the first step is to evaluate your finances. First, determine the monthly income you receive after taxes, insurance, and other withdrawals. Next, take the time to write out all of your fixed monthly expenses and outstanding debts.
Fixed expenses refer to recurring payments that more or less remain the same from one month to the next. For example, this may include expenses for rent or mortgage, utilities, cell phone services, loan payments, car insurance, cable and internet services, child support, alimony, and so on.
Next, review what monthly expenses you have that fluctuate. This may include the cost of groceries, eating out, and entertainment.
2. Create a Budget and Determine Where You Can Save More
Once you have a greater understanding of your finances, you can create a budget to help you reduce your monthly expenses and save more. Review each of your expenses and determine if that expense can be reduced. This might be as simple as shopping around for better car insurance rates, reducing your internet or cable package, comparing cell phone plans, and eating out less. If you’re struggling financially after divorce, creating and following a budget can help even in the worst of times.
3. Ensure You No Longer Have Any Joint Accounts
Joint accounts are common when you’re married. For example, you may have shared a bank account, credit card account, loan account, and so on with your former spouse. After a divorce, you must ensure you no longer share financial accounts with your former spouse. Doing so will help protect you financially and ensure that your ex-spouse cannot damage your credit or apply for additional credit under your name.
4. Update Your Beneficiaries and Your Will
When starting over financially after divorce, you will need to take the time to update your beneficiaries, will, and other legal documents. This may include insurance policies and retirement accounts if you have previously listed your spouse as a beneficiary on your account. When updating beneficiaries, make sure you revise your living will if you have one. Other legal documents that you may need to update after a divorce include advance directives and the power of attorneys.
While this may not seem like a pressing concern immediately after divorce, it’s easy to forget and can cause more problems for your beneficiaries in the event of your death. Taking the time to update all of these legalities will ensure that your former spouse does not remain entitled to anything following your death.
5. Save for Emergencies
Saving for emergencies is a good practice for anyone and can help prevent you from struggling financially after divorce. Emergency funds should equal up to six months of your current living expenses. This buffer will protect you in the event of unemployment, illness, home-related unplanned expenditures, and so on. You may not be able to secure the total amount immediately, but you should work towards putting extra money away each month until you have adequately prepared for emergencies.
Working With a Divorce Lawyer When Starting Over Financially After Divorce
Struggling financially after divorce is common. Not only are divorce proceedings costly, but separated spouses must depend on their individual income rather than the joint income they may be used to. In addition, child support and alimony payments can also substantially affect your finances after your divorce has been finalized. Therefore, it’s essential that you speak with an experienced divorce attorney when filing for divorce or requesting a change to divorce agreements. Struggling financially after a divorce is not uncommon. If you need advice, contact Divorce Lawyers for Men today at 360-866-7293 or schedule a consultation online.
