From court fees to alimony, divorce can be a costly affair. Financial suffering often follows, especially as divorced spouses transition from two incomes to one. By establishing the following prudent habits early on, you can set yourself up for success without your spouse’s financial contributions.
- Create a Budget
Was your ex previously responsible for budgeting? It’s time to take charge and get a handle on your daily spending. Draw up a new budget that takes your altered living arrangements into account. You’ll also want to track your spending closely to determine how it’s changed since your divorce.
- Build an Emergency Reserve
Now that you’re divorced, you can no longer depend on your ex for financial assistance in times of trouble. It’s more important than ever that you set aside a portion of every paycheck for your emergency savings. Start small if necessary; the sooner you establish the habit of saving for your emergency fund, the better.
- Save For Retirement
Divorce impacts not only your immediate finances, but also your long-term savings. After the dust has settled, determine your target savings for retirement and how much you’ll need to save each year to achieve this end goal. You’ll also want to re-examine your 401(k), Roth IRA, or other accounts.
- Avoid Your Credit Card
Many divorcees turn to credit cards to make ends meet. A few transactions here or there may seem harmless, but they can add up quickly — especially if you’re already dealing with divorce-related debt. If possible, stick with cash, check, or debit card payments.
- Make the Most of New Career Opportunities
Did you previously hold back on big career commitments due to your spouse? This is your opportunity to embrace once-neglected professional pursuits. Take calculated risks to set yourself up for career success — and the increased earnings that accompany it.
The law firm of Barna, Guzy & Steffen, Ltd. can get you on the path to financial success during and after your divorce — reach out today to learn how.