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Tips for making financial decisions during divorce

On Behalf of | Mar 27, 2024 | Divorce

It is likely that virtually every aspect of your life will change if you opt to divorce your spouse. However, this doesn’t mean you’re powerless about how those changes will unfold. Consider your finances. While you may have to make some adjustments to adapt to life after divorce, a solid plan can help you move forward with well-founded confidence.

For example, you’ll want to craft a detailed budget that reflects your new income and expenses. This budget should account for single-income living. Prioritize essential expenses, such as housing, utilities and groceries. Identify areas where you can reduce spending. Armed with this information, you can make changes to your spending and determine if you need additional streams of income.

Reassessing your financial goals

Divorce can significantly alter your financial goals and priorities. Take time to reassess your short-term and long-term financial objectives. This might include adjusting your savings goals, reevaluating retirement plans and creating new investment strategies. Consider consulting with a financial advisor to help navigate these changes and develop a plan that aligns with your new financial reality.

Building or rebuilding your credit

Divorce can impact your credit score, especially if you have joint accounts or if the division of debt was uneven. Start building or rebuilding your credit by ensuring all bills are paid on time, reducing debt levels and keeping credit card balances low. If necessary, open new accounts in your name to begin establishing a separate credit history.

Understanding and dividing marital debt

One of the complex aspects of divorce involves dealing with marital debt. It’s important to understand every debt’s classification in the division process. Generally, any debt accumulated during the marriage is the responsibility of both parties. Work with your ex-partner to divide this debt. It may involve refinancing certain debts or selling assets to pay off shared obligations.

Property division during divorce can have a significant impact on your financial future, so it’s critical to work with a legal representative who can let you know your options and work with you to work toward a suitable resolution. You do have power in this process, and a greater understanding of your finances and priorities will only serve to boost it.