Once a divorce is finalized, a person is free to embark on that long-awaited new chapter in their life, meaning they’re ready to finally start calling their new place home and adapt to life on their own.
While this is an exhilarating prospect, it can also prove to be somewhat disconcerting further down the line. This is particularly true for financial matters, as a newly divorced person may find that after only a few months they are perhaps not as fiscally comfortable as they would like to be.
As alarming as this can be, the good news is that experts have identified a series of relatively painless steps that the newly divorced can take to help improve their financial lives going forward.
Don’t be overcome by anxiety
As scary as it can be to discover that your finances are not in as good of shape as you believed, experts indicate that it’s very important not to become paralyzed by anxiety. Indeed, they urge people to take comfort from the fact that they can turn things around and to remember that their chances of going broke are remote.
Create a financial inventory
Experts indicate that the first step in the process is creating a financial inventory so that the newly divorced person has a single document outlining as clearly and concisely as possible, how their money is being spent, saved and even unknowingly lost.
To do this, experts advise creating a spreadsheet with four different headings — income, assets, expenses and liabilities — and putting as many detailed entries as necessary under each.
The creation of this ongoing ledger coupled with a look at a free copy of credit reports, they argue, will not only help a person discover exactly where they stand, but give them confidence about moving forward.
Establish a budget and keep it balanced
Experts indicate that once the financial inventory is created, a person is free to move on to creating a budget. Indeed, this step can help them determine whether they are spending more than they are taking in, and, by extension, whether they need to make any minor or major adjustments in terms of spending or employment. Similarly, the act of creating a budget can let them know that they are actually doing just fine from a financial perspective.
We’ll continue this discussion in future posts …
In the meantime, if you are considering a divorce and have questions relating to financial matters like spousal support or property division, consider speaking with an experienced legal professional.