6 Post-Divorce Financial Planning Tips

After you get divorced, you are likely to find yourself having to navigate the world as a single person, which includes figuring out financial independence. As you embark on your next chapter, you’ll have different needs than you did when you were married, and you might find that you are self-sufficient in some areas and still in need of help in others.

If you have been married for the majority of your adult life, you might feel befuddled over the new financial considerations you are facing. Following a divorce, in particular, you have probably already spent a good deal of time and money fighting for a favorable outcome and taking care of aspects such as finding new living arrangements and learning to live on one income, so more financial responsibilities can seem daunting. But don’t let the challenges overwhelm you! This is not an ending, but a new beginning, and with the right information and support on your side, every challenge becomes an opportunity for you to grow, adapt, and overcome.

The team at Z Family Law have helped numerous clients move onto the next, happier chapters of their lives by guiding them through all of the legal and non-legal aspects of divorce, including navigating new financial circumstances.

If you are divorcing or considering divorcing, here are our top financial planning tips. Read on to find out how you can set yourself–and your money!--up for success in your post-divorce life.

1. Make Sure You Have Your Financial Documents In Order

Having your financial documents secure is essential, not only for understanding the state of your finances, but for keeping your identity and accounts secure. Make sure that your mail is rerouted to you and that you have your licenses and social security items in your possession.

You will need copies of your ID, social security card, and birth certificate for many aspects of your financial life, including opening new bank accounts and investing in the stock market. If you need new copies of these documents, you can request them through your local government agency.

2. Separate Your Joint Accounts

If you had any joint accounts with your spouse, the first thing you will want to do is take your name off any of those accounts and claim your portion of the finances. It’s probable that if you are already divorced, you have long since removed yourself from your joint account and the wealth has been divided. If you have not yet already, you should establish a separate account of your own where you can receive direct deposits of your paychecks and through which you can pay your bills.

3. Establish A Realistic Budget

One of the first things you will want to do following your divorce is to evaluate your finances so that you know exactly how much money you have, what debts you still owe, and what money you will be paying and earning monthly – be it from your job, alimony, or any other sources of income.

Based on the realities of your finances, you should take an honest look at your monthly expenses, cancel any subscriptions or other charges that you do not need, and look for other ways to minimize your spending. This is also a good time to look at your credit score and check for any disparities such as accounts opened in your name that you do not own.

After you have your finances in order, compose a monthly budget and stick to it strictly. Account for common expenses such as rent and groceries, as well as any expenses you know are forthcoming.

4. Create A Safety Net

When you are creating your budget and accounting for expenses like rent, food, and car payments, you will also want to build a safety net into your budget. Set aside a certain amount each month as part of a savings fund for emergencies or large expenses that you do not currently foresee. Especially if you have children, you want to know that you are covered now that you might not have as many fallback options as you did when you were married.

5. Update Your Bills, Estate Plan, Beneficiary Designations, And Other Accounts

When you are creating your budget and exploring your monthly expenses, look into your accounts and make sure that essential bills are in your name. Bills that your spouse previously paid should be the first ones you update under your own name.

Look into your other accounts and life plans in order to make sure that they are all up-to-date. One important thing you need to update, if you have one, is your estate plan. In many states, parts of your will are automatically invalidated by a divorce if you have named your ex-spouse a beneficiary, but you still need to fill in the blanks. Update your wills and trusts to reflect new beneficiaries. Similarly, update beneficiaries on other accounts, such as your life insurance policy.

Another update you might need to make is to your safety deposit box. It’s easy to overlook possessions you might have been keeping secure with your spouse, but you should make sure that your valuables are secured solely under your own name.

6. Research Tax Implications

Now that you are no longer married, you will be filing your taxes as a single person, so familiarize yourself with the current tax landscape. Working with an experienced CPA can help you understand how you can maximize your options and project what deductions you can make and, ultimately, what you will owe. Use this information when building your budget so that you can set aside enough money for when tax season arrives!

Trust Z Family Law To Guide You Through Your Divorce

If you have concerns about divorcing, you can rely on the compassionate guidance and fierce advocacy of Z Family Law. We know what you need to get out of your divorce in order to successfully turn the page to the new chapter of your life, and we want to help you do it with confidence.

Whether you have questions about financial management or other aspects of divorce, such as custody questions or how you can retain your most essential assets, we are here to help you on all fronts. We throw the full weight of our team behind your divorce procedure so that you can rely on more than just one experienced attorney. Reach out to schedule an initial case assessment and we will go over the specifics of your case to  figure out how we can help you move forward.