Divorce often leads to a change in lifestyle. You will have two households that need to be supported on the income and assets that were supporting one. In most cases that does lead to some changes in lifestyle for both parties. What will that look like for you? Will you be okay?
At Divorce Financial Professionals, we’re experts in looking at the entire financial picture during the divorce process. As Certified Divorce Financial Analysts (CDFA), we’ll guide you through the steps of uncovering and dividing your assets to determining the best course of action moving forward. We’re there to assist our clients with their finances until the final agreement is signed… and beyond.
Among the most common questions we’re asked are:
Can I afford my life once my divorce is finalized? Will I be okay?
And there is no one answer for everyone.
Change in Lifestyle
Regardless of whether you’re male or female, employed or not, wealthy or not… divorce results in some degree to a change in lifestyle. Separate households means absorbing the upfront expense of setting up those homes with furniture and other household necessities. Childcare costs could increase if one parent needs go back to work or increase his/her weekly working hours. Retirement accounts will be affected, meaning you’ll likely need to change the way you save.
Before all this causes you more anguish, let us look together at the things you can take control of NOW that will help ensure a higher likelihood of well-being down the road.
Gain an Understanding of your Finances
One important aspect of preparing for the divorce process is developing an accurate budget to contribute to your understanding of your finances. Consider the steps below:
If you don’t have a current budget, obtain your bank and credit card statements for the previous 6 months to a year;
Familiarize yourself with recurring expenses like car, mortgage and utility payments. Then make estimates of discretionary expenses like dining out and entertainment by averaging your spending for same over the past several months;
Familiarize yourself with annual expenses such as car registration, life insurance payments, etc;
When your budget is established and your expenses are understood, look at the sources of income to determine whether you’ll have enough to meet your expenses. If not, something will need to be adjusted. We can help you with those options which will depend upon where you are in the divorce process.
Once your divorce is finalized, review your budget periodically to make sure your spending is aligned with what you’ve budgeted.
Remember… you’re not alone in this process. Divorce Financial Professionals is expert in creating budgets and we’re available to assist you in developing a budget for your divorce and post-divorce life.
Indeed, divorce is a stepping stone to a new life. So it’s important for people to have a game plan such that their transition into a new independent financial life is a successful one. Let us help you make sure you get started on the right foot.