Post Divorce Financial Planning – Pt. 1

Post Divorce Financial Planning – Part 1

After your divorce is finalized, you must put effort into restarting your long term financial plans. No doubt this life change has reduced your disposable income and made living twice as expensive as before. This is not the time to plow money into retail therapy. The financial demands of the road of life continue to appear every day. But with a little planning and effort, the ride will be better than you imagined.

To be ready for it, you must ask yourself these important questions: Are you prepared for long haul financially? Do you live a fiscally responsible live style? Has the divorce shifted your financial priorities? Is college, home ownership, or a new car still in the budget? What is important to your now financially? Do you have a plan to get there?

You probably do not have answers to all of these questions. But here are a few tips to help you develop a plan for a bright financial future.

  1. Expect the unexpected. As you have learned by now, life happens when you least expect it, and it is often expensive. So, no matter what your other goals are, work on putting away 6-12 months of your monthly expenses into a safety net fund. Shoot for 5%, 10% or even 20% of your monthly income to be set aside on the same day every month. It may take months or even years to build it to a comfortable level, but if you put away the same amount every month, it will accumulate fast.
  2. After the safety net fund, determine the financial goals the matter to the NEW YOU the most. Is your focus on helping your kids plan for college, or buying a new house, or maybe a new car. Whatever it is, focus on your goal.
  3. Get your kids involved in a positive way. Make them part of the team in this new adventure. Give them a small budget for clothes, or school supplies, or snacks. Teaching them about finances and to adjust to financial change is a good lesson in life and an opportunity for everyone to grow closer.
  4. Be wary of the everyday expenses drain. The coffee stop on the way to work, the afternoon vending machine, a quick run through a fast food restaurant, or the snacks in the grocery store line all add up. These add little to your life and will save you will save a bundle.