Divorce is unsettling for many reasons, but financial worries are at or near the top of the list. Too many people might stay or be tempted to stay in unfulfilling – at best – or toxic marriages for fear of the financial fallout of going it alone.
If you’re the partner who let your spouse handle all the money matters, divorce – and the financial independence that goes with it – can be especially scary.
It can be hard to make it on one income after you’re used to being half of a dual-income partnership. Or if you’ve been a stay-at-home parent and suddenly find yourself having to go back into the workforce, that’s a challenge, too. But neither of those scenarios is insurmountable. You just need to know a few things, and financial independence will be yours to celebrate.
1. Make a new budget
Get a good grasp on what your monthly financial picture looks like. What do you have coming in? What do you need to pay out? If your new financial reality shows more expenses than income, determine where you can cut back.
2. Figure out what you can let go of
Maybe you don’t need the country club membership. Some clubs will allow you to put your membership on hold temporarily. You won’t get to use the golf course or the swimming pool, but you won’t be paying pricey monthly dues, either. A country club membership is an obvious “nice to have” you may be able to let go of – at least for a time.
You may decide you don’t need to send the kids to $50,000-per-year private school. While this is an option for people with good public schools in their area, it’s admittedly not for everyone. If private school is a must for your children, consider talking to the school’s financial aid office about a payment plan until you’re back on your feet. Or a scholarship might be an option.
If you’re funding a child’s college education, look into financial aid. Or consider talking to your child about a work/study program or getting a student loan.
Other things you may be able to let go of: the expensive mortgage. (Consider downsizing.) Fancy (and expensive) vacations. Instead, a staycation where you become a tourist in your own town is one alternative. A series of day trips to interesting attractions near your home may not be Disney World, but it can be enlightening, fun ... and budget-friendly.
3. Acknowledge that divorce, even an amicable one, stinks
Give yourself time to grieve the loss of your marriage. Process the loss. Then, you can more readily move on.
A friend recently made an offer on a house she really wanted. The house and its yard really fit the new life she imagined and was hoping to achieve for herself. She had even pictured her dogs enjoying the fenced-in, landscaped backyard. Alas, she was outbid for the house. She told me she was grieving the loss of that house and the life she thought it would provide.
Every loss deserves to be acknowledged and felt. Only then can we get on with the business of living.
4. Give yourself the credit you deserve
The death of a loved one and divorce are two of the worst of life’s passages we can endure. If you’re going through a divorce and still making it to work, parenting your kids and engaging in life, then give yourself a pat on the back. You’re making it through a traumatic time. Life will be good again, but this is a rough patch. Be gentle with yourself.
Part of giving yourself credit is maintaining your integrity during what can be a brutal process. Imagine the life you want for yourself when all this is over. (And it will be over.) Hold on to your dignity and self-respect. Do right by you.
5. Speaking of credit, make a plan to build back your own credit
A first step is resolving joint debts with your estranged spouse. Figure out who will pay for what. Close accounts. Make sure you don’t miss payments on joint credit cards. That’ll contribute to your credit score taking a nose dive.
In fact, don’t miss a payment on any of your bills – cellphone, utilities, insurance. Paying your bills on time is the No. 1 thing you can do to protect your credit score.
If you don’t have your own credit history, now’s the time to start establishing one. Let’s say you were an “authorized user” on your ex’s credit card. You need your name removed from that credit line, and you need a card – and a credit history – in your own name. Look for a credit card with no annual fee and one that offers 1% or 2% cash back on purchases.
Try to keep your credit use to a minimum. After payment history, credit utilization – the percentage of total credit you’re using – is the most important factor of your credit score. Experts recommend keeping credit utilization to below 30%.
Don’t let personal finance worries hold you back from living your best life – married or not. That’s what financial independence is all about.
Tonya Graser Smith is a Board Certified Specialist in Family Law, licensed North Carolina attorney and founder of GraserSmith, PLLC, in Charlotte, N.C. She focuses her practice on divorce, child custody, child support, alimony, equitable distribution, prenuptial agreements and other family law matters.
Verizon's Latest Streaming Perk Bundles Netflix and Max for $10
Verizon's myPlan customers will be able to take advantage of the Netflix-Max streaming bundle soon.
By Joey Solitro Published
Stock Market Today: Stocks Slip to Start Jobs Week
Coming off a fifth straight weekly win, the main indexes took a breather ahead of a busy week of jobs data.
By Karee Venema Published
Why More Retirees Might Come Out of Retirement
It’s often not solely because of financial reasons, but because of a lack of purpose in retirement. This financial expert can relate.
By Chris Blunt Published
What Would Accreditation Change Mean for Real Estate Investors?
Investors determined by a test to be ‘financially savvy’ would be allowed to invest in ways that they can’t now without having a certain level of assets.
By Edward E. Fernandez Published
Five Simple Year-End Tax Tips to Set Up a Successful 2024
If you wait until the new year, you may miss out on some valuable tax planning strategies. Here’s what you need to know before closing out 2023.
By Julie Virta, CFP®, CFA, CTFA Published
Six Estate Planning Tips for Younger Generations
Millennials and Gen Zers are taking their estate planning seriously. These tips can help make the process seem less daunting.
By David Weinstock, CFP®, AEP®, CPA Published
Year-End Tax Planning for a Financially Healthier Retirement
Getting your tax ducks in a row for the end of the year can decrease your tax liability and make the most of your income, now and in retirement.
By Ryan Marston, Investment Adviser Representative Published
Where to Start Financially After a Life-Changing Diagnosis
Dealing with an illness, yours or your child’s or that of another loved one, is hard enough without adding financial duress. Here are some considerations and suggestions for covering expenses.
By Stephen B. Dunbar III, JD, CLU Published
Six Ways to Prepare for Widowhood and Protect the Surviving Spouse
No one wants to have to plan for losing their spouse, but having plans in place and knowing what to do when the time comes can alleviate at least some of the stress.
By Tyler Hill, Investment Adviser Representative Published
Creating a Blended Family? Three Key Steps to Consider
Blended families can make your finances and estate extra complicated, but you can head off some of those issues with careful planning.
By Adam Frank Published