Money Tips for the Recently Divorced
Many couples have filed for divorce this year as the effects of COVID-19 have ravaged their lives. Unemployment, illness, financial issues and quarantining have all taken its toll on marriages across the country. Divorce filings have gone up over the holidays as couples end their marriages and start the new year fresh.
Keep in mind that your financial picture will become vastly different as you try to navigate life solely on your income. You won’t have a partner to help you pay bills, so daily life may become more stressful as you struggle to live your new life.
Therefore, you need to be prepared. Make life easier post-divorce by making these financial moves.
Open Your Own Accounts
You probably had joint accounts when you were married, but you’ll need your own once you get divorced. One of your first steps should be to establish finances in your own name. Find a bank you trust and open a checking and savings account. If you don’t have any credit cards, now is the time to apply for some. Good credit will be helpful in many ways when you need a new vehicle or a place to live.
Create a Budget
You are now single and you may have moved out of the marital home, so your new living expenses will be different. How much are you paying for rent? What do your utilities look like? Your grocery expenses have likely decreased. Are you paying or receiving child support or alimony? Take your new income and expenses into consideration and make sure you are living within your means. Take a good look at entertainment expenses and non-essential spending and make adjustments as needed.
Create an Emergency Fund
Sometimes the unplanned happens. Your car breaks down. An appliance stops working. The dog needs to go to the vet. You need extra cash on hand to prepare for these expenses. It’s a good idea to have enough money to cover six months of expenses. You may want to prioritize saving right after a divorce. It may be necessary to supplement your income with a second job, at least temporarily.
Think About Retirement
After divorce, you may only be thinking about living from day to day, but you really need to be thinking about what will happen 10, 20, 30 or 40 years from now. If your company offers a 401(k) plan, contribute to it. If not, open an IRA at your bank. If you’re close to retirement, consider Social Security. You may be able to receive 50% of your ex-spouse’s benefits if you were married for at least 10 years and have not remarried.
Seek Legal Help
Ending a marriage and transitioning into single life is not an easy task. One of the biggest issues a person will face is finances. Households often go from two incomes to one, making things complicated.
Get help with money matters and other aspects of divorce with help from the Fort Lauderdale divorce attorney Edward J. Jennings, P.A. Our team can give you the resources you need for a successful life post-divorce. To schedule a consultation, call 954-764-4330 or fill out the online form.