When you divorce, even if you get a fair settlement, adjusting to your new financial situation as a single person is going to be challenging. You’re no longer splitting housing and other expenses between two incomes. Even people with considerable assets find that their lifestyle needs to change after divorce.
Therefore, it’s essential to evaluate your income and expenses and make a budget for yourself. Many people who are financially well-off haven’t had to do that in a long time. However, you should know how much you’ll need to live on comfortably.
Your family law attorney may recommend that you do this budgeting early in the divorce proceedings so that you can work toward a settlement and property division that will let you move forward without undue financial strain. Until you get used to your new budget and how far your income will take you, it’s best to avoid expenditures on unnecessary items or big-ticket purchases.
However, don’t neglect your savings. It’s more important than ever to have an emergency fund. The recommended amount of liquid assets to have on hand is three to six months. You also want some money set aside in case you lose your job or have to deal with medical bills, car repairs or other unexpected expenses. You may not be able to get to that point right away, but make it a goal you should be striving for.
Be careful when dividing up accounts and credit cards with your ex. You may be anxious to get your name off of these things so that your money and debt aren’t intertwined with your spouse’s. However, closing accounts and canceling credit cards can impact your credit rating at a time when you need good credit. Your Florida family law attorney can provide guidance on this and other matters as you go through the divorce process and plan for your new life.
Source: Quicken Loans, “Being Financially Free After a Divorce,” Catherine Alford, Feb. 19, 2018
