Adjusting to life financially after a divorce
There’s no doubt about it, going through a divorce can be an emotionally trying time. Ironing out a divorce settlement, attending various court hearings, and dealing with competing attorneys can all weigh heavily on the parties involved. In addition to the emotional impact a divorce can have, it’s important to be aware of how your financial position will be impacted. Now, more than ever, you need to make sure that your finances are on the right track. You will then be able to put the past behind you and set in place the building blocks that can be the foundation for your new financial future.
Reevaluate/re-prioritize your financial goals:
Following a divorce you’ll want to reevaluate your financial goals. While you were married, you may have set certain financial goals with your spouse. Now that you are on your own, these goals may have changed. Start out by making a list of the thing you would now like to achieve. Do you need to put more money towards retirement? Are you interested in going back to school? Would you like to save for a new home?
You’ll want to be sure to re-prioritize your financial goals as well. You and your spouse may have planned on buying a vacation home at the beach, however, you may find that other goals may become more important.
Protect and/or establish credit:
Since divorce can have a negative impact on your credit rating, consider taking steps to try to protect your credit record and/or establish credit in your own name. A positive credit history is important since it will allow you to obtain credit when you need it, and at a lower interested rate.
Review your credit report and check it for an inaccuracies. You’re entitled to a free copy of your credit report once a year from each of the three major credit reporting agencies.
Change your beneficiary designations:
After a divorce, you’ll want to change the beneficiary designations on any life insurance policies, retirement accounts, and bank or credit union accounts you may have in place. Keep in mind that a divorce settlement may require you to keep a former spouse as a beneficiary on a policy, in which case you cannot change the beneficiary designation.
This is also a good time to make a will or update your existing one to reflect your new status. Makes sure that your former spouse isn’t still named as a personal representative, successor trustee, beneficiary, or holder of a power of attorney in any of your estate planning documents.