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Many individuals do not consider the long-term financial outlook after divorce. On April 25, in a post titled, “Lansing couples should learn finances during divorce,” we told our readers about the importance of understanding their current financial situation as they get into the divorce process. What may be considered even less by individuals is how their financial situation will look after the divorce — with all its property division and possible support issues — is final and they have moved on with their individual lives.
One of the first things that individuals should do is consider their expenses and income apart from their soon-to-be ex-spouse. Even mundane expenses such as cellphone bills should be considered because as a newly independent person, this type of bill will be once again the responsibility of each individual on their own. Creating a budget is a positive way individuals can plan ahead. Should they find this process difficult, they may benefit from considering the help of a financial adviser who can work through the process with them.
Divorce carries more than short-term financial implications. Things such as checking and savings accounts certainly need attention, but so do retirement plans and insurance. And even the coming year’s income tax return should be considered. Individuals may be shocked by the reality that expenses are higher and income is lower because of the split of what was likely a two-income household. Many planning strategies can be implemented during the divorce process to make sure things are under control once the paperwork is finalized.
Like couples everywhere, Lansing couples may have felt the demands of the difficult economy. Such realities, and anticipating such things in the future, is another good reason for why couples should consider their long-term financial security during and after the divorce.
Source: USA Today, “Before divorce, you should get financially prepared,” Hadley Malcolm, Sept. 10, 2012