Divorced women are one of the largest groups of financially vulnerable people. Divorce can be an expensive process, and it can be even more costly if you're not prepared. It's important to have a plan in place before you get divorced so that you don't end up suffering financially once the divorce is final.
As a woman going through a divorce, it’s important to understand how financial planning can help you.
Divorce brings a lot of changes beyond your marital status. In some cases, divorce may mean changing careers or finding a new job altogether. It’s important to plan ahead and make sure that the career change aligns with your goals and interests so that it will allow for financial stability in the future.
Here are some steps to help you start financially planning for your divorce and life after:
Communicate Openly With Your Partner About Finances
Talking about money can be a hot-button topic for couples. The first step is to talk openly about your financial realities and how they will change after a divorce. Be sure to discuss any debts that will need to be paid off before divorce (including credit card bills or student loans). It's important that both parties are aware of these terms so there are no surprises later down the line.
Once you've talked it over with each other, make note of the conversation and what was hashed out. Even a simple email between the two of you can help clarify points down the line if memories falter.
Assess Your Financial Realities
Before you can begin to build a long-term financial plan, it's important that you understand what money is coming in (your income) and going out (your expenses).
Think of every expense you have over a year and break it down into months. (Need financial planning help? The Divorce Planner's monthly budget calculator walks you through every possible expense to consider, and has all the tools you need to assess your finances now and for the future.)
Educate Yourself So You Know What You'll Need To Negotiate
The most important thing you can do is to plan ahead. Know what you are entitled to and what you need to negotiate for, as well as what you need to save for your financial future and how much money will be available for your current expenses.
Setting consultations with local family law attorneys and mediators is a great way to gather information before moving forward. Many people offer free consultations, ask before booking!
Having everything you need in hand, specifically your essential documents, statements and a list of all of your assets will help you ask questions with specificity. Not sure where to star? Check out our Get Organized digital bundle. It walks you through everything you'll want to have at your fingertips moving forward.
Determine Your Future Financial Needs
When you are considering divorce, it is important to determine your financial needs in the future. This will include saving for retirement and other goals such as buying a home or sending children to college.
These things may seem far off at this point, but they can happen sooner than you think. Planning ahead allows you to be more prepared and less stressed when managing divorce finances.
If you took time away from the workforce in order to be a stay at home parent or care for another loved one, divorce can put you in a much more financially precarious position. Figuring out in advance what you need to negotiate in order to have retirement savings is critical.
If you're not financially prepared in advance of divorce, you're putting yourself in a precarious position for life after divorce.
The good news is that if you make the time to prepare in advance of a separation or divorce you'll be able to create a plan to navigate the financial changes that lay ahead with ease. Don't forget to include these 6 often overlooked expenses as you move forward!
The sooner you start, the better off you'll be. Being proactive is always the best place to be when going through big life challenges. Divorce is never easy, but you can lessen the financial stress of divorce by planning ahead.