Going through a divorce is a challenging time on multiple fronts. You have to process the sense of loss while digging through paper trails of your married life, attending court, and attempting to reach a divorce settlement. You also have to accept that your financial position will change and prepare accordingly.
You’re not just divorcing your spouse: you’re also leaving your financial status quo behind. Getting your finances on the right track during a divorce will create the foundation for a strong and healthy financial future.
Review Your Current Situation
Even if your spouse will be paying you alimony and / or child support, you’ll have to re-orient your financial perspective by taking the following into account:
- You will no longer have your former spouse’s income to rely on;
- You will be responsible for expenses you were once able to share, such as utilities.
Ultimately, you may no longer be able to live the lifestyle you had prior to the divorce. This is not necessarily a negative thing, but some financial reorientation is in order.
Create a Budget
Put together a budget that reflects your new monthly income vs. expenses. Divide the latter into two categories: required and discretionary. Required expenses include housing, food, and transportation. Discretionary expenses could be vacations, eating out, and entertainment. If you will be living on less income, you’ll want to reduce your discretionary spending, but don’t eliminate it entirely. Allowing yourself the occasional reward is important.
Review Your Financial Goals
You may have set certain financial goals with your spouse when you were married. Now that you are single, those goals may no longer apply. Sit down and create a list of the things that are important to you now. Do you want to go back to school? Are you living in an apartment now and wanting to save for a new home? Rank these goals in order of priority and act accordingly.
Review and Reduce Debt
Avoid the temptation to use credit cards to provide extras you might not be able to afford now. If you have personal debt, create a plan to pay it off as quickly as possible. Below are some useful tips:
- Pay off high-interest debt first;
- Monitor balances and interest rates;
- Avoid late fees;
- Check out refinancing or debt consolidation options.
Investigate Savings Opportunities
If you have children, you may be able to claim certain tax credits and exemptions, especially if you are the custodial parent. These include:
- Child tax credits
- Dependency exemptions
- Child care expenses
Divorce is hard, but how you deal with your finances and other aspects of your life that change post-divorce will determine whether you thrive or simply get by. You deserve the former, and following the tips in this article can point you in the right direction.
We care about your success as much as you do. For representation, guidance, and support during your Texas divorce, contact us today.