Divorce can not only affect you at an emotional level, but can also create financial challenges. To begin with, you can minimize your costs of divorce by choosing divorce mediation instead of expensive litigation to resolve matters.
A divorce mediator can also help you and your ex-spouse resolve critical issues related to the division of marital property as well as spousal and child support obligations, while protecting the best interests of both sides. On the other hand, a contested divorce and bitter litigation could lead to a significant reduction in your income and net worth.
In any case, after a divorce, it is time to rebuild your finances and use it as a launching pad for a better, more prosperous future. Given below are six steps you can take to restore a healthy financial position after divorce.
1. Take Stock of Your Situation
Calculate your net worth (the difference between your assets and liabilities). If you have high-interest debts, make a plan to pay them off as quickly as you can. Depending on your preference, you can go for the snowball strategy (paying off the smallest debt first and going up the ladder) or the avalanche strategy (paying off debts with the highest interest rate first and then going down the ladder).
2. Update Your Savings, Investment, and Estate Planning Documents
One of the most important things you need to do after getting a divorce is to designate new beneficiaries for all your savings and investment accounts. If you have an estate plan, update it and designate a new beneficiary, new successor trustee, as well as a new healthcare and financial attorney-in-fact.
3. Reduce or Eliminate Unnecessary Expenses
If your monthly income has reduced as a result of your divorce, it is critical to cut or reduce expenses to the extent you can. From shopping in thrift stores to cooking your own meals, cutting out expensive coffee and energy drinks, and canceling unwanted subscriptions, there are a number of things you can do to reduce your day-to-day expenses to a significant extent.
4. Build an Emergency Fund
If your savings have been depleted as a result of your divorce, rebuilding your emergency fund should be your first priority. Set up a savings account and contribute a portion of your monthly income regularly – until you have sufficient savings to cover at least three to six months of your expenses.
5. Set New Goals
Since you no longer have a shared future with your spouse, it is time to prioritize what is important for you and set new life goals as well as financial goals. Think about what you want to accomplish 5, 10, or 20 years down the line and set goals accordingly.
6. Increase Your Income
Try to increase your income by asking for a raise or promotion at work, finding a better-paying job, picking up a side hustle, or setting up a home-based business. Consult with a financial advisor and invest the extra income judiciously to achieve your short-term and long-term financial goals.
Reliable and Effective Divorce Mediation Services for You and Your Ex
The last thing you want when you are trying to rebuild your finances after divorce is a legal battle with your ex over property division, spousal support, child support, visitation, or any other related issue.
At Advanced Mediation Services, we have highly experienced and skilled mediators who can help you with divorce matters as well as post-divorce issues like modification of spousal or child support or changes in custody or visitation arrangements.
To find out more about our mediation services, call us today at 856-669-7172 or contact us online and schedule a free consultation.