Managing finances post divorce
Managing finances post divorce can be a complex and challenging task.
Additionally, this is a major struggle for dads in middle age who find themselves living a very different life to the one they are accustomed to.
For me, it was one of the hardest yet most rewarding aspects of coping post-divorce. Learning to start again and rebuild your wealth can greatly impact every aspect of your life going forward.
You may be reading this and feeling that there is no way forward to achieving the life you lost, especially financially but I am proof you are wrong.
Not only has rebuilding financially made life much easier when paying the bills, but it also opened up opportunities in relationships, with friends and new interests.
I believe it’s the first key stage in relaunching the new you.
Here are some important steps to help you navigate this process
Assess
Assess your financial situation by evaluating your income, assets, and debts. Understand your financial standing after the divorce and create a clear picture of your current financial resources.
Update your budget
Create a new budget that reflects your post-divorce income and expenses. This is a must-do exercise. Consider all your financial obligations, including housing, utilities, transportation, healthcare, and childcare. Make sure your budget is realistic and aligns with your current financial situation.
Change your habits
One of the easiest and most costly traps to fall into is carrying on as though nothing has changed.
Nothing could be further from the truth. Your thinking is the first thing that needs to change. If you don’t make this change, then nothing will.
Carrying on as before is an easy mistake to make. I did it. You will probably too, especially in the early days when you see spending as a way to cheer yourself up.
Pressure to Buy
There may also be pressure to spoil kids, impress new partners and friends or just go mad and treat yourself to the mid-life crisis Lamborghini. Although tempting, until you have re-established your finances I recommend curbing your buying. Besides spending money you may need in the future, do you really need the newest latest toy? Too often we buy things that we don’t actually need only want.
Once you are happier emotionally and financially, then these purchases can be made. Although once you have sorted yourself emotionally and financially it’s funny how the material things in life become less of as need. Indeed, for me money has bought me time with my family rather than material gain.
Review your financial goals
Evaluate your long-term financial goals and adjust them to reflect your new circumstances. Your priorities may change after a divorce, so it's important to reassess your objectives and make necessary adjustments.
Early on, I decided that I wanted to give up work. Alternatively, if I couldn't give up fully, I no longer wanted to be tied to a regular workplace, pattern or hourly rate. Furthermore, I wanted to work from home. This change meant a review of how much and from where I earned my money. For me, working smarter, not harder became my priority. Learning to leverage people, time and technology I started my own online business.
Additionally, aged 50 I needed to start enjoying life and slowing down the endless 9-5.
Emergency fund
Establish an emergency fund by building an emergency fund to cover unexpected expenses. Having a financial safety net will provide peace of mind and help you handle any unexpected financial challenges that may arise. There will always be unexpected bills some of which may not be insignificant. Additionally, if at the end of the year, you have some spare, then you will be able to look at treating yourself if prudent.
Legal Update
Review and update all your legal and financial documents, including your will, insurance policies, beneficiary designations, and retirement accounts. Make sure these documents accurately reflect your post-divorce wishes and beneficiaries. There's no point giving it all back to her and her new chap if the worst should happen.
Separate
Establish separate joint accounts. If you had joint bank accounts or credit cards with your former spouse, close those accounts or convert them into individual accounts. Establish new accounts in your name to maintain financial independence. Failure to do this sooner rather than later can cost you dearly with no easy redress.
Professional advice
Consider consulting with a financial advisor or planner who specializes in divorce-related financial matters. They can provide valuable guidance on managing your finances, tax planning, investment strategies, and help you make informed decisions.
Manage debt and credit
Manage debt and credit by evaluating your existing debts. Additionally, develop a plan to pay them off. Money borrowed will cost more in the long fun, especially with high-interest rates. Make timely payments to maintain a good credit score. If needed, consult a credit counselling agency to assist you in managing your debt.
Income boosting
Explore income-boosting opportunities: If necessary, explore ways to increase your income. This could involve seeking better job opportunities, acquiring additional skills through education or training, or exploring new income streams such as freelancing or part-time work.
As I have mentioned earlier the need to find a different working model was at the top of my list. I was done with the 9-5, two weeks a year holiday and being told what to do that I had put up with for so long.
Starting again can be difficult, especially in mid-life.
Workplaces are no longer the places of old. They are mostly powered by computers and run by 20-somethings. Not the most inviting of environments for many. Alternatively, I chose to harness the power of modern technology and the digital gold rush which was taking place online.
Harness Technology
Technology advancements are making both home life and work life more enjoyable and accessible. We are now able to connect with friends, family and strangers in a way that 20 years ago would not have been possible. If you haven't already, then take time to learn and embrace the technology revolution that is available to you. This new knowldge will be vital in both work and play. Indeed, dating is one big area in that technology has opened up huge possibilities for single men. Harnessing the changes in technology, allows you to use your experience of work and life to gain an advantage over your younger counterparts. Thus, giving you the edge to succeed or start again. They may think they have the upper hand with their tech-savvy ways but if we learn to embrace modern thinking and technologies we can take huge advantage of the opportunities available in modern times. Never had it been so easy to start a business and transact with the entire world in all of history.
Take care of yourself
Managing finances after a divorce can be emotionally and mentally challenging. Remember to take care of your well-being by seeking support from family, friends, or professionals.
Alternatively, there are many great self-help books which I have found useful along the journey. These are just 2 I found particularly helpful as there are many others.
-How to fix your shit by Sha Wazmund
-Breaking the Habits of being you by Dr joe Dispensa
Prioritize self-care and maintain a positive outlook on your financial future. Thinking positively will in turn make positive things happen.
Remember, each divorce situation is unique, and these steps may need to be customized to fit your specific circumstances. If you are in any doubts about financial matters always consult a professional.
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Many thanks in advance and enjoy.
Best Ade