Divorced women are one of the largest groups of financially vulnerable people. Divorce can be an expensive process, and it can be even more costly if you're not prepared. It's important to have a plan in place before you get divorced so that you don't end up suffering financially once the divorce is final.
As a woman going through a divorce, it’s important to understand how financial planning can help you. Divorce brings a lot of changes beyond your marital status. In some cases, divorce may mean changing careers or finding a new job altogether. It’s important to plan ahead and make sure that the career change aligns with your goals and interests so that it will allow for financial stability in the future.
Here are some steps to help you start financially planning for your divorce and life after:
Communicate openly with your partner about finances.
Talking about money can be a hot-button topic for couples. The first step is to talk openly about your financial realities and how they will change after a divorce. Be sure to discuss any debts that will need to be paid off before divorce (including credit card bills or student loans). It's important that both parties are aware of these terms so there are no surprises later down the line. Once you've talked it over with each other, make note of the conversation and what was hashed out. Even a simple email between the two of you can help clarify points down the line if memories falter.
Understand what money is coming in and going out
Before you can begin to build a long-term financial plan, it's important that you understand what money is coming in (your income) and going out (your expenses). Think of every expense you have over a year and break it down into months. Not sure where to start? Divide & Thrive's digital divorce planner walks you through every possible expense to consider, and has all the tools you need to assess your finances now and for the future.
Plan ahead by knowing what you need to negotiate
The most important thing you can do is to plan ahead. Know what you are entitled to and what you need to negotiate for, as well as what you need to save for your financial future and how much money will be available for your current expenses. It is also crucial that you understand how much money needs to be invested in order for it grow into something bigger when the time comes, which means having a good grasp of risk tolerance and investment strategy.
Determine your financial needs in the future
When you are considering divorce, it is important to determine your financial needs in the future. This will include saving for retirement and other goals such as buying a home or sending children to college. These things may seem far off at this point, but they can happen sooner than you think.
Planning ahead allows women to be more prepared and less stressed when managing divorce finances.
Financial coach Eboney Byrne shared some great tips for women with Divide & Thrive. You can listen to them here.
The hard truth is that if you're not financial prepared in advance of your divorce, you may not be able to afford your needs. The good news is that if you take the time to prepare in advance of divorce you will be able to create a plan to make the changes you need to make in order to navigate your post divorce budget changes. The sooner you start, the better off you'll be.
Being proactive is always the best place to be when going through big life challenges. Divorce is never easy, but you can lessen the financial stress of divorce by planning ahead.
Divorce is hard. Divide and Thrive makes planning for one easier.