Finances After Divorce
With 50% of marriages ending in divorce, not every person gets the happily ever after they dreamed of. While this is a difficult time both emotionally and financially, it is also a very important time. During the process of separating, it is vital to evaluate your finances to help prepare for your future. Here are several tips to help you get started.
Get the Full Picture
In order to start the process, you must first know what you have. Looking over important documents, such as bank statements, credit card and loan balances, tax returns, and bank statements, can help you determine where your finances are. By taking stock of your past and current financial situation, you will be able to better prepare for the future.
Revisit Your Budget
Your budget will change when you separate from your spouse, especially if you shared finances. Going from two incomes to one can mean cutting out nonessentials. Creating a detailed budget that includes both necessary and discretionary purchases can help you get on the right track.
If you have joint accounts, such as bank or investment accounts, make sure you change the registration. Update your insurance information to include only items that you own. It is also important to review your estate and beneficiary information and make changes as needed.
Update Your Emergency Fund
If you had an emergency fund with your spouse, you may find that you will not need to save as much now. If you do not have an emergency fund, now may be one of the most important times to develop one due to having a single stream of income as opposed to two.
Check Your Credit Score
Your credit score may change after going through a divorce. Its important to see where you stand in order to apply for credit cards or loans, which may be more important now that you’re single.
Divorces are tough and require a lot emotionally. Making sure your finances are established as soon as possible can help you ease into this new chapter of life. It is common to feel lost or in need of guidance during this time. A financial advisor can help assess your situation and plan for going forward.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment Advice offered through GWM Advisors, a registered investment advisor. GWM Advisors, Southern Point Investment Partners, and Fidelity Investments are separate entities from LPL Financial.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any