Pretty well everyone knows that I’ve been married three times and, yes, I’m single again! Kicked to the curb. I know the toll divorce can take on a body emotionally and financially. But there some things you can do to take the financial sting out of divorce even as you learn to cope with the one-ness.
Create a new financial plan. Contrary to what a lot of folks think, a financial plan is not something you create and then stick to like gum to a shoe. You have to tweak it. And if you get divorced, you’re likely going to have to do a major overhaul. A little a’ feared of taking up the reins of your money ‘cos the other guy always did it? Start with the basics, like your budget (yes you’ll need one more now than ever) and your cash management (the overdraft protection you buy to see you through the rough spots should be gone in six months).
Review your insurance. Were you on your mate’s health insurance at work? Do you have your own life insurance? Did you consider your partner to be your disability plan? It’s time to take a good look at what you need to do to put a safety net into place for you, and maybe also for your kids.
Use, then rebuild your EF. Your emergency fund exists for things like illness, job loss and, yes, divorce. Having used up your EF, make it a priority to put it back into place. If you’re just getting by each month as you adapt to your new budget, look for small things you can do to slip away a $10 or $20 each week for your EF. Look hard.
Get your name off all the joint credit. I despise joint credit. I get why you both had to sign the mortgage, but the car loan? The line of credit? The credit cards? Ugh! If you’ve personally signed for joint credit, your responsibility for that credit doesn’t go away because you separate or get a divorce. You have to get your name taken off that credit or lenders may come banging on your door down the road.
Don’t hang on to the house. While you may want to maintain some stability in your life—and in the kids’ lives if you have them—emotional stability shouldn’t come at the expense of financial stability. Your home may be your castle, but holding on to a home you cannot afford for sentimental reasons is a recipe for future financial disaster. The decision to stay in the family home should be a black and white one: run the numbers. If you can comfortably stay in the home, stay. If the home is putting your new beginning and the rest of your life at risk, sell and get something more suitable to your new status and budget.