If you know that you’re getting a divorce or even if you suspect it, it’s incredibly important to start planning for the financial aspects of it. Plan for the financial factors that could come up during your divorce to protect yourself while ensuring you remain in a position financial position. Be prepared for these things to consider with divorce financial planning.
Capital for Day to Day
This may not be the most important of the things to consider with divorce financial planning, but it will have the biggest impact on your daily life. You’ll need cash flow to make sure that you’re able to function during and after the divorce. Your cash flow will pay for things like you recurring bills and any one-off (but expected) expenses (car maintenance, yearly memberships, or wardrobe purchases). Your daily capital should be one of the things that you plan for first since it will always be something you need to have.
Expenses for Dependents
While you can lump daily expenses for your dependents into your cash flow, there are other things that you’ll need to consider if you have kids. This is especially true when you’re going through divorce as those expenses could change. You may be required to pay for things like therapy to help your children through the divorce. Prior to a divorce, you may also have relied on your spouse’s insurance for your children. In many instances, this will stay the same but if it is part of the agreement that it needs to change, you’ll need to consider insurance as one of your dependent expenses.
Insurance for Yourself
Even if the other party is going to keep paying for insurance for your children, they will not be required to continue paying it for you or will only be required to pay it for a set period of time after the divorce. It’s important that you find a viable health insurance option for after the divorce so that you’ll be protected in the event that anything happens.
While you’re exploring health insurance options, now is a good time to also look at things like auto insurance, life insurance, and homeowner’s (or renter’s) insurance.
Ongoing Support for (or from) Spouse
Depending on your situation, you may be required to pay support or you may be receiving support. If you are the party responsible for paying support, you will need to work that into your plan. It’s one of the things to consider with divorce financial planning even if your support automatically comes out of your compensation from employment. Know how much spousal or child support you’ll be paying and then adjust your budget to work without that money.
If you’re going to be receiving child support or spousal support, know that it is there to help. You should have a plan in place. Consider putting some of the child support into savings, using it for things like sports and activities, or purchase things for your children you might not have been able to afford without it. You can do something similar if you’re receiving spousal support. Having a plan for both will keep you from getting in a situation where you don’t know what to do with your money.
Whether you’re working longer hours or you’ve had to find a new job because of a move after divorce, you’ll need to be prepared for compensation changes as a result of your divorce. While you’re planning, this is one of the things to consider with divorce financial planning and is important because it could determine things like your savings, budget, and more.
While your estate changes won’t directly impact your money situation during your divorce, you still need to make sure that they’re a part of your divorce financial plan. Consider changes to beneficiaries and any other updates that you need to make after your divorce. Keep in mind that some of these things may be dictated by your court order so check it or with your attorney first!
The way that your retirement is handled will likely change after your divorce. In some cases, you might need to pay a portion to your ex and in others, you might want to make changes to your retirement plan. Be sure that you include all of these in your financial plan.
Focusing on Taxes
Your taxes are going to change as a result of your divorce. Know that this is one of the things to consider with divorce financial planning and talk to your accountant as soon as possible. By being prepared for a tax season that’s different from the rest, you’ll be able to make the best decisions regarding your financial situation at tax time!
Divorce financial planning is an in-depth process that requires knowledge and resources. Don’t leave it to chance. Contact Wiser Divorce Solutions for help today.