Going through a divorce can be overwhelming, especially when it comes to managing the financial aftermath. Whether you were married for a short or long time, your financial plan is going to change. Here’s a look at what to expect and how to take control of your finances moving forward.
Your Financial Plan Will Change
When you were married, you likely had a joint financial plan. Whether it involved buying a home, planning for retirement, or saving for vacations, those shared goals will need to be reworked as you go through the divorce process. Now is the time to set new financial goals based on your new life as an individual.
- Homeownership: If you want to keep your home or purchase a new one, you’ll need to assess how much you need to save for a down payment and adjust your timeline accordingly.
- Retirement savings: Divorce may also affect your retirement savings, especially if you shared an account or have a different plan than before. Make sure you update your retirement strategy for your future.
Take Stock of Your Financial Picture
Divorce can shake up your financial landscape, so take the time to evaluate your entire financial situation. Here’s what to do:
- Pull your credit report: This will give you a clear picture of what financial accounts you’re responsible for.
- Separate joint accounts: If you had joint bank accounts or credit cards, now is the time to close those accounts and switch to solo accounts that suit your needs. Look for bank accounts that offer benefits like low fees and a high APY (Annual Percentage Yield) for savings accounts.
Prepare to Negotiate a Fair Financial Agreement
As part of your divorce, you may be required to negotiate how to split your finances. While this may involve going to court, keep in mind that a fair financial agreement might not always align with what’s allowed legally. The goal is to reach an agreement that makes financial sense and sets you up for success.
- Assets and liabilities: Ensure you have a clear understanding of the assets you’ve accumulated during the marriage (real estate, savings, retirement accounts, etc.) and any debts you may owe. This will help you navigate the division process.
- Legal and financial advice: Don’t hesitate to consult with a CERTIFIED FINANCIAL PLANNER™ to help you develop a fair and financially sound agreement. Their expertise will guide you through the negotiation process and help ensure you don’t miss any important details.
Moving Forward
Divorce is never easy, but it doesn’t have to be financially devastating, especially if you approach it with a plan. With the right resources, including financial planning advice and support, you can rebuild and thrive in your post-divorce life.