Once all the paperwork has been filed and approved by the court, you are officially moving on to your post-divorce life. Before too much time passes, be sure to address these steps to get you started on the right path.
- Review and revise your financial goals.
Write down and review your financial goals for your new future. What do you want it to look like? You may need to revise your goals to meet your new life. This may mean cutting back on spending, reducing debt, or adding a few years to your retirement timeline. You may also need to establish an investment strategy or personalized financial plan through a financial advisor
- Take control of your career
Typically, both spouses will need to work post-divorce. If you currently don’t have a job, start looking for work now to minimize the time you are without an income. Your former spouse may be willing to provide some financial support during this time, but that may not always be the case.
- Notify All Insurance Policies
Be sure to review the beneficiaries on any policies and make sure that your ex-spouse’s name is removed (unless you agreed otherwise in your settlement). Meet with your agent to be sure that you have all the coverage you need and that you understand all details of your policies. If you’re going to be using COBRA health coverage through your ex-spouse’s employer, contact your insurer to find out how to set it up.
- Notify Your Employer
Your employer may need to change company records, health or life insurance plans, and update accounts regarding retirement or 401(k) programs. You also need to fill out a new W-4 with your new tax filing status.
- Get Organized
If you don’t have one, create a filing system for all your important financial documents as well as any statements that need to be retained for tax information. This can be an old-style file cabinet or a digital file online. If online, go with cloud storage such as Dropbox, Google Drive, or One-Drive for security.
- Create a Budget
You’re embarking on a new life with a whole new set of finances. Sit down and create a budget. If this is too overwhelming, ask your Financial Advisor for help.
- Update your Estate Plans
Everything has changed. Be sure that your new wishes are clear so that there is no confusion if you unexpectedly pass away. If you have given your former spouse a power of attorney, you should ensure that it is revoked in writing. If the power of attorney was somehow recorded as part of a public record, a properly acknowledged revocation should be recorded as well.
- Take charge of your retirement situation
Divorce can alter your retirement nest egg and separate you from assets that may have taken years for both of you to accumulate. If you hope to retire on schedule, you may need to increase the amount of money that you put aside. If you are not already doing this, now may be a good time to maximize your contributions to your employer sponsored retirement plan or open your own IRA. Lastly, make sure to update your beneficiary designations on all financial accounts that you have.
- Be Kind to Yourself
It can take time to start feeling like you are yourself again. Many people tell me it may take over a year to recover from your divorce. Be sure you have a strong support network in place. If you feel yourself struggling, do not hesitate to invest in a good therapist.
Starting fresh may be exciting or nerve-wracking. You don’t want to jump into major financial decisions before getting your bearings and making sure you fully understand the landscape. Many people find themselves in a situation where they are responsible for financial tasks that they never had to perform in their marriage. Take time to educate yourself and understand your financial options. Seek out a financial expert who can help you grasp a better understanding of your money matters.
If you need help post-divorce, we can assist you with personalized financial planning and investments.