Many of the decisions you and your spouse must make as you dissolve your marriage involve finances. Like, how you will divide real estate or investment accounts. If there’s a need for monetary support arrangements, there will be pressures on each side: what can the primary breadwinner afford to pay and still be able to live. Conversely the dependent spouse worries about how much is needed and how to make ends meet.
During a divorce, emotions can run high. You may feel overrun by the toll your divorce is taking on you and your children. Processing your thoughts and feelings is undoubtedly vital to moving forward. Yet, sound financial planning can also help ease long-term worries about moving forward on your own.
Three financial steps to consider implementing
Many divorcing couples struggle to agree on who gets what. Often, the higher the value of the assets at stake, the more contentious divorce proceedings become.
You and your partner might own and operate a business, control multiple properties or have a high-yield investment portfolio. Regardless, you would be wise to enlist the help of a professional to assess the full value of your marital property and guide you through the process of protecting your interests.
Throughout your divorce proceedings, some of your action steps may include:
- Take time to weigh your options, rather than hurrying to agree on a settlement. It’s natural to get to the point where you feel like you would do anything to be done with your ex. However, it is important to make thoughtful decisions. For example, the immediate stress of the divorce sometimes motivates people to negotiate for immediate access to cash, rather than accepting an asset from which you will not benefit until after its sale. However, that is not always the best long-term plan. In addition, if the assets in your case do not include a lot of cash, liquidating assets to raise cash may have adverse tax consequences.
- Spend conservatively for the year following your divorce. Instead of making major financial decisions, take time to gauge how you will achieve your desired new lifestyle, and evaluate what you need to prosper.
- Learn about how you can develop financial security for yourself. Evaluate your past financial choices and work with your financial planner to invest in ways you believe will be safe and still get a dependable rate of return.
Additional factors, such as insurance or tax ramifications, may unexpectedly affect your bank balance. However, getting the information necessary to make knowledgeable decisions can position you to get favorable results for your future.