Jul 23, 2015

Surviving Divorce by Reclaiming Your Life – Secure Your Financial Future (Part Three of Five)

Divorce and Finances, Divorce and Tax, Divorce Survival

Now that you have focused on getting your physical well-being, you’re your emotional strength back, you’re ready to look at what you need to do to get your finances back on track so your future is more secure.

Recalculate to Reclaim Your Financial Health

Maybe you handled the household finances, or maybe your spouse did. Perhaps you shared the responsibility. In any event, the math has changed and you need to recalculate. It’s overwhelming for someone going through divorce to contemplate daily expenses, let alone the what ifs (what if the car breaks down? my child needs orthodontia? I get laid off? — not to mention planning for college expenses or your own eventual retirement. But you need to do what you can from where you are now and start with the basics: a budget, a back-up plan and a buddy.

The Budget

Determine your income and expenses. In additional to your ongoing monthly obligations, include incidentals such as lunch money, outlays for class trips, tips for service workers, occasional take-out dinners. Hopefully, you’ll be in the black. If not, that will help you find places to trim costs. You can also re-evaluate other cost saving measures (an extra week between haircuts, switching insurance companies or telecommunications providers for better rates, paying off existing credit card debt with 0% interest offers for balance transfers). Your budget is your road map for living within your means, which is crucial for your sense of stability and security as you rebuild your life.

The Back-Up Plan

You’ll need a cash reserve and contingency plan. Short of winning the lottery, there’s only two ways to improve your financial health: spend less or save more. If your budget doesn’t allow for savings, perhaps you can barter your talent for event planning or tutoring for lawn work or haircuts. If working outside the home or taking on a second job is untenable, try creating your own small business, calligrapher for hire or consolidation consultant, for example. There are dozens of internet sites for resale of all types of consumer goods. Everything from designer labels to used computers to Pez dispensers. Some sites will even take care of shipping costs and labels. Be creative. It could be fun as well as profitable.

The Buddy

Don’t go it alone. Find a financial advisor whose credentials includes divorce planning. Or you can find one on your own. At the Alpha Center for Divorce Mediation, a financial counselor is an integral part of the mediation process. He helps you examine your options, evaluates the tax ramifications as a result of the divorce and helps you formulate a workable financial plan for the future. For ongoing assistance, check out the Alpha Resource Directory is another great source for financial advisors located near you.

©2015 Alpha Center for Divorce Mediation