Divorce drains you – emotionally and financially. Nobody will argue this. But on the other side of it, there are hopefully happier days and financial independence to enjoy.
In counseling clients on achieving financial independence after divorce, here’s what I say to them.
1. Take advantage of the foundation you’ve just built
In divorce, you’ve just spent a lot of time, energy and money to basically do a complete inventory of your financial life. This is probably the only time in your life you know by heart the last four digits of every bank account and every investment account. You probably have a firm handle on how much you spend on everything.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Keep up the good work. Continue this practice of knowing exactly what you own and how to access it, as well as tracking how much you earn and spend. If you use this foundation that you’ve built, you will always know where you stand financially, and that knowledge can help inform future financial decisions.
You might also see areas where you can streamline this foundation. Maybe there are retirement accounts that would be more efficient if merged into one investment vehicle. Maybe you have too many cash apps and that makes it hard to keep tabs on your spending. The foundation can always be improved upon.
2. Dream a little
What you want from life now might different than what you and your spouse wanted as a couple. Living on a golf course might not be appealing if you’re not the one who golfs. Or maybe you want to travel more now that you’re not attached to someone who isn’t into that. Maybe you want to go back to school. Maybe when you retire you want to live in the south of France and take language and culinary classes. Dream, dream, dream.
Take time to dream about what you want. And then start to think about what you need to do to get there.
3. Work with a professional
Turning your dreams into reality might call for the help of a financial professional. You might think you know what you need to do, but you might not. Or, you might dismiss or give up on a dream before you even get started, because you think it’s not attainable. Someone like a financial planner, financial adviser or Certified Divorce Financial Analyst (CDFA®) can help you identify all of the incremental steps to take and things to do to make you dreams come true.
Go about hiring a financial pro the same way you did your divorce lawyer. Ask friends and family for referrals. Interview candidates and choose the one with whom you click and won’t mind working with.
4. Use technology to stay on track
There are so many ways to use technology to achieve and maintain financial independence. For starters, use automatic payments whenever possible. That way you will never miss a payment, which will help you raise your credit score over time. Often after divorce, your credit score takes a beating – and it might not be your fault, as it might have to do with something your ex did or didn’t do.
Second, consider bookkeeping software to track income and expenses. You don’t have to be a business owner to use something like QuickBooks, and there are subscriptions to suit all kinds of users. This will ensure you have a real-time snapshot of what you are earning, spending and saving. You will never not know if you can afford something or where your money is going.
Lastly, there’s an app for that. If you are trying to establish better spending habits, find an accountability app and set that as your goal. Some apps, like StickK, will even let you choose a consequence – like donating to a charity or cause of your choice – when you fall short of your goal. Doesn’t that sound like a win-win for everyone? A couple other apps to consider might include Habitica and HabitShare, which allow you to develop good habits with your friends.
Here’s a final thought: Even if you just know you will never marry again, think about how you might want to maintain your financial independence in future relationships. What is important to you that wasn’t before you were married? What would you want to do differently? Knowing the answers to these questions are important steps in maintaining your hard-fought financial independence.
-
-
Why Houses Make for Terrible Wealth Transfer Vehicles
Home may be where the heart is, but after it’s inherited, it’s where heirs have to manage upkeep and deal with family conflicts related to what to do with it. What should parents do instead?
-
You’ve Just Sold Your Business: Now What?
The transition into a new phase of life after selling your baby can be difficult, especially if you were reluctant to sell, but here’s how to refocus.
-
Why Houses Make for Terrible Wealth Transfer Vehicles
Home may be where the heart is, but after it’s inherited, it’s where heirs have to manage upkeep and deal with family conflicts related to what to do with it. What should parents do instead?
-
You’ve Just Sold Your Business: Now What?
The transition into a new phase of life after selling your baby can be difficult, especially if you were reluctant to sell, but here’s how to refocus.
-
This Is How You Can Be a Snowbird in Retirement
There’s a lot to consider, and warm weather shouldn’t be the only deciding factor. For instance, will you rent or buy? What’s the tax and health care situation?
-
You’re Fired? How AI Could Change the Labor Landscape
Machines replacing humans in the workplace is not new, but today’s advances in artificial intelligence could affect hundreds of millions of jobs.
-
What Happens When Student Loan Payments Resume?
With an increased monthly debt burden, borrowers could cut discretionary spending, causing economic turmoil. On the bright side, alternative ways to pay for college are being considered.
-
Considering Annuities? Here’s What to Keep in Mind
It takes time and effort to understand the many different types of annuities that are available and whether they’re right for you. You can start here.
-
Inflation and Retirement: Five Ways to Soothe Your Worries
Sometimes you can deal with inflation and economic turbulence by not doing anything at all, but there are considerations for retirement savers to keep in mind.
-
How to Embrace Your Financial Wellness This Fall
Economic uncertainty can take a toll on your mental health if you don’t stay on top of your financial wellness. Here’s where to start.
