There are times in life that are filled with great loss, pain and confusion, and two examples of this are divorce and widowhood. Of course, the circumstances are different, but both bring out a lot of strong emotions and make us feel vulnerable just when we should be strong and prepared to survive this event without negative economic consequences.
I will talk about the subject of widowhood another time, and today I am going to focus in particular on finances during and after divorce. I am very sorry if you are in this situation right now, and I would like to accompany you through this stage by showing you the things you need to take into account to get through it. And yes, you will get through it!
A divorce is a strong emotional shock, but this is where we must most of all keep a cool head and prepare for our exit from the marriage by protecting our financial health.
Below I detail some important tips on what to keep in mind when going through a divorce:
Find your support team: First, you’ll need friends and family to be your emotional support, someone to talk to. Also, a good divorce attorney to guide you through the legal side; a licensed Accountant/Financial Counselor with experience in divorce for advice on taxes and other financial matters; an insurance provider to review your home, life, or auto insurance policies, or to take out any new insurance you may need; and a religious leader for spiritual support.
Physical care: Few things create more stress than a divorce, and your body knows it. Try to eat well and healthy, cut down on caffeine and alcohol, and take time to go for a walk or go to the gym.
Your children are not part of your emotional support team: on the contrary, you are their support. Don’t speak badly about your ex in their presence, as it only increases the pain caused by the separation. Whether at 2 or 20 years, divorce is a traumatic event for children, so instead of venting your frustration on them, it is preferable to show them that you are also suffering from this process but that you are confident that you will get through it, hug them every day and tell them that you love them. This will be much more healing for both of you.
Know your numbers: Searching for this information can be a chore. You’ll need to have your taxes from the past few years, and financial information on any properties you own, including mortgage, insurance, etc. Copies of your investment account statements and retirement accounts. Other essential financial actions to take with the advice of your attorney include opening a new bank account without your soon-to-be ex’s name on it and updating all insurance policies and beneficiaries. You’ll also need to update your will, especially if you have children.
Create an emergency fund – this is your safety net and is essential in times of crisis. Put everything you can on hold and focus on saving as much as you can. This is not the time to make any major financial decisions.
Make adjustments to your budget: Knowing where each dollar you have available goes will help you determine if you need to sell your house, move to a smaller one, change jobs, change locations, etc. And the golden rule for this moment is to cut all non-essential expenses and save as much as possible. In my Simplified Budget Course, I explain in a practical way how to manage your emergency fund and how to use the different types of personal budgets so that each dollar works for you.
Take a deep breath and stay focused. It is a time of crisis, but you will overcome it. Staying focused and thinking calmly will help you a lot in the process.
I hope these essential points will help you successfully navigate this transition.
