Going through a divorce can be challenging, especially when it comes to managing your finances.
After a divorce, you need to plan for your future financial stability.
Create a new budget
Divorce significantly impacted the finances of the 989,518 couples who divorced in 2022. Therefore, after your divorce, create a new budget based on your individual financial situation. Account for income, expenses and debts. Learn where your money goes and how you can better manage it.
Update your financial accounts
After divorce, update your financial accounts to reflect your new status. This includes bank accounts, retirement accounts, insurance policies and any other joint accounts. Remove their name and update your beneficiaries to avoid complications in the future.
Build an emergency fund
Having an emergency fund is important for unexpected expenses or financial setbacks. Aim to save enough to cover at least three to six months’ worth of living expenses. Start small if you need to, but make building your emergency fund a priority to provide a financial safety net.
Review and adjust your investments
Review your investment portfolio and make any necessary adjustments based on your new financial goals and risk tolerance. You may work with a financial advisor to align your investments with your long-term objectives.
Understand your tax situation
Familiarize yourself with any tax deductions or credits you may be eligible for as a single filer. You can work with a tax professional for personalized guidance.
Focus on financial independence
Set goals for saving, investing and achieving your long-term financial objectives. If you need to, take steps to increase your earning potential through education, training or career advancement opportunities.
Seek support from friends, family or a professional counselor if you struggle to cope with the financial aspects of divorce.
