While divorce isn’t the end you were looking for when you got married, life changes. Incompatibility and numerous other issues may make it the best option for you. One major problem post-divorce, however, is adjusting to your personal financial situation. Rebuilding assets takes time, especially if you stayed home raising children instead of focusing on your career. Here are some tips to make your post-divorce financial life easier:
Don’t Depend on Financial Support
When you’ve emphasized your family over your career, it’s nice to get financial support after the marriage has ended to make up for it. Be careful; according to CNN, more than $100 billion back child support is owed in this country. It’s a coin-flip on whether your ex will keep up with payments, and you don’t want to balance your budget with that level of risk involved. Instead, do everything you can to cover your basics and essentials without funds from any outside sources. If you do get spousal or child support paid, it will be a nice monetary surprise, instead of a source of stress and frustration.
Determining who gets what assets often gets covered in divorce court, but if you’re on amicable terms with your ex, it’s a good idea to figure out who gets what yourselves. The most important part of this process is making sure your name is off any titles of assets you don’t have an ownership interest in. If you don’t, your ex’s financial decisions affect you, and even if you aren’t paying for the assets, the debt counts against you in debt-to-income calculations.
Develop Money Management Skills
If you were taking care of the bills and finances before, the only adjustment you need to make is switching from a double-income household (if you both worked) to a single-income budget. It’s a big adjustment, and it’s even worse if you’ve never managed money before. A financial adviser is a big help for getting you on the right track, but even something as simple as a personal finance app helps you develop good financial strategies.
Establish Your Own Credit
Even if you kept some assets and credit cards out of your joint property, it’s a good idea to get some credit established that has only been in your name. If you had to go through a bankruptcy or plan on going through one due to divorce, some cards specialize in post-bankruptcy credit. You don’t have to wait years after a bankruptcy to get re-established. Secured credit cards use a savings deposit as collateral, giving you a way to get a new credit card without rejection after rejection. Use it sparingly, and pay off the credit card in full each month, as you don’t want to get into debt if you don’t have to. Instead, use it solely for the purposes of getting your credit score back up. In a few years, when you see your ex bought a used BMW, you can waltz into the dealership and get one too.
Evaluate your Life Insurance Policies
You should pull out your life insurance policies and determine if your beneficiary designations are still applicable. Sometimes the divorce court may require that your ex-spouse maintains his/her beneficiary status. In that case, no change would be necessary, but if you can and do remove your ex-spouse as a beneficiary, make sure the remaining beneficiaries’ shares of your death benefit are as you intend them to be.