Divorce is tough. There is the natural emotional turmoil that occurs, potentially irksome new living situations, possible missteps in considerations of custody – and then there is the financial hole one can find themselves suddenly in. Divorce can be devastating to your psyche and bank account; but there are several ways you can successfully combat the latter.
The Necessary Steps
STEP 1 – Take a gander at your old budget and REVISE it.
Look at your current source(s) of income. Retirement may either be imminent or a long way off, but you need to be mindful of it. Carefully scrutinize your where you spend money and on what. You will inevitably discover some venues that can now be deemed extraneous and can be significantly cut back. The freed up cash can then be applied to the necessities.
STEP 2 – Separate all accounts.
This may seem fairly obvious, but many newly divorced individuals forget to do this. You need to close any joint checking/savings/retirement accounts and open new ones in your own name. Also, any co-owned vehicles or property must be divided accordingly. If you have a mortgage or loans, talk to your bank about potential refinancing options: you may be pleasantly surprised at the new benefits that you could qualify for.
STEP 3 – Change beneficiaries.
A common oversight, many people will leave their ex-spouse as the sole beneficiary of their insurance or retirement plans. When making the appropriate changes here, it may also be prudent to have your attorney update your will and/or any other agreements that allow your ex to receive pecuniary benefits or make legal decisions in your name (ie – “end of life” terms).
STEP 4 – Make sure you’re insured.
Luckily divorce fits under the category of a “major life event,” so you will still have full coverage under a spouse’s plan for 60 days from the actual divorce. Yet after that you need to make certain that you’re covered. If you can not secure insurance through an employer, you should think about purchasing COBRA through your ex-spouse’s company. This will entitle you to receive health/dental insurance benefits for a length of time.
STEP 5 – Emancipate yourself from debt.
The divorce itself can cost you a pretty penny and leave your account in the negative and creditors at your back. You need to make a detailed assessment of which loans should take precedent in being paid off first (obviously the ones that have the greatest interest rates). The more credit cards that you can pay off and eliminate the better your credit score will be. Another tip is to thoroughly comb your Credit Report for any fallacies (this can occur) and rectify these with the credit bureau.STEP 6 – Become a Habitual Saver.
Take a cold, hard look at what you spend your money on. Certain expenditures, such as apparel, vacations, and entertainment can always be cut back. The money saved here can go directly into a savings account. Try paying more into your 401(k) and IRA (if you don’t have a retirement plan set up though your work).
STEP 7 – Set up a spending regimen.
There are online programs/software that allow you to put your budget information in, and they formulate a comprehensive system to elucidate where and how you can effectively spend. This will allow even the most financially challenged person to have a solid plan for intelligent spending.
STEP 8 – Don’t pay for a lawyer’s boat.
If at all possible, do not let your ex inadvertently drag you back into the courtroom. Of course certain situations may arise where your ex is not fulfilling their (legal) end of the bargain (lateness with alimony, problems with visitation), but every minute you spend back in court will inevitably cost you exponentially more than the issue you’re fighting about. Arguments with your ex, when you take a step back, may actually be frivolous in the grand scheme and not at all worth your time and, ultimately, precious money.
STEP 9 – Sell off extraneous assets.
Various assets that you may have acquired through your marriage can go a long way in aiding your budget – when sold through the proper channels. Automobiles and various other valuables can provide a substantial amount of unexpected cash. If you are the party who has retained the diamond engagement and/or wedding rings, there is a very convenient place to sell them for a maximum profit. Diamond Lighthouse specializes in just these type of after-market sales, providing diamond jewelry owners with an incredible platform to sell their gems for the highest payouts possible. The money thusly procured can not only pay off past debts but help set up one’s future.
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