Divorce and Money Topic #2 – Divorce is here – Now what do I do?

Divorce is here – Now what do I do?

(If you are divorced, please share your thoughts about divorce and money)

I won’t pretend to know know what you went through

In my last topic, “Divorce and Money Topic #1 – Divorce is coming – what to do?â€Â I offered some advices for preparing for a divorce. I will now focus on things you can do to improve your financial life.  Let me review some points I made in my last post:

Before the divorce:

  • Have separate checking accounts
  • Re-title joint possessions into individual ownership.  Sell some if you owe lots of money.
  • Build up full emergency fund of $10K to $15K
  • Change beneficiary names for various documents
  • Prepare this year’s tax

After the divorce is final:

  • Don’t medicate all this pain you’re going through with spending
  • Negotiate the division of COMBINED retirement fund, social security income, taxable assets and equities
  • DON’T make any LARGE purchases for 6 months
  • Keep the four walls intact: Food, shelter, utilities, and transportation
  • Start a budget and stick to it

Starting your new financial life as a divorced person: Once you are on your own, you really have no choice but to become more independent and smarter about money.  There is no money fairy that will fix your financial problem or make you smarter by the day. 

  • Believe that you have a value in the workplace with your skill set and educational background
  • Make a plan to reduce your monthly expense and to increase your income.  This may require you to add new skills or license under your belt. 
  • Read a self-help book or non-fiction book a month to improve your mindset as well as to think outside the box
  • Find an accountability partner (not a shopping partner) to verify that you are sticking to your own set of goals and keep you on the right track

After a divorce, unless you have a few million dollars in your bank account, you may want to follow these guidelines – if you are not using them already:

  • Learn to live below your means
  • Don’t create new debt (cut up all credit cards and replace them with one debit card)
  • Become debt-free as soon as you ca, (if you’re not there already)
  • Save up and pay cash for things
  • Keep sufficient emergency fund at all times (3 to 6 months in expenses)

There are many good educational books available at your public library and online.  Here are few useful resource links:

Next post will cover divorce with minor chidren


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