Divorce can cause a lot of turmoil for you financially the longer it goes on and the more combative that it gets. While financial differences are the leading causes of divorce, they’re also responsible for most of the stress that you’ll feel as you try to put your life back together. Whether you are the one paying your spouse alimony and/or child support, or you’re the one who has to make due on that and a limited set of skills as you prepare to return to the workforce, it’s no picnic for either side.
“The ideal time to begin working on the financial issues related to your divorce is before the formal process begins,” notes California Divorce Financial Planning. Ideally this is true. But there will still be a lot of planning that you have to do post-divorce once the dust settles. Here are some smart financial moves that can set your post-divorce life on the right path.
1. Budget your new life.
The expenses and the income that you had prior to the divorce will likely change dramatically once the papers are finalized. That’s why the first thing you need to do when you’re newly single is survey the financial landscape, log all sources of income, and all remaining debts and expenses. This can be liberating in the same way that cleaning your work space helps you feel more productive.
2. Start saving small.
No matter how cash-strapped you are, there are probably opportunities to save money so long as you start small and grow from there. It may mean one less cup of coffee from McDonald’s or just $5 per week into an account. Over the course of a year, that’ll add up, and it will also illuminate additional savings opportunities.
3. Target any high interest debts that you may have.
Interest is what will keep you in debt and struggling, so get rid of it as soon as you can. Target your high interest debts first and push what you can towards the total. As you pay things off, rather than rewarding yourself with a spending spree, roll over some of that expense money to hammer the next highest interest debt you have. Rinse and repeat until you’re debt free, and try to stop using credit that you can’t pay off at the end of the month.
4. Consider picking up side work for extra money.
Companies understand the cost savings opportunities that hiring freelancers provides. The growth of this employment sector has been huge over the last six years, and if you’re feeling cash-strapped, consider using your skills and knowledge to add side work in order to pay more bills or stuff a little extra money into your savings and investments.
Post-divorce financial planning is essential to regaining your composure and independence. What are some tips that have helped you? Sound off in the comments section.