Anyone in Virginia who has gone through a divorce knows that it can create some financial challenges for both spouses. Suddenly, you have to pay for a whole household of expenses instead of splitting it with another person. You’re also doing it with less income than before. Then, you have to address shared retirement accounts and other investments. Dealing with such a major financial change can be overwhelming at first, but there are some good ways to make things work.
First, it is important to take ownership of your finances. No matter what your role was when you were married, you are now in control of your money completely, so you have to get familiar what you have.
Once you know what you have, start to think carefully about your investments. Continuing to build retirement funds will be crucial, but it is also important to plan beyond a 401(k) or IRA. Creating a bigger investment strategy that includes a diversified portfolio will help you maximize your saving efforts. Once you know what your new expenses are, you can determine how much to invest.
Finally, update your estate plan, beneficiary designations and insurance policies. Most importantly, this means updating your beneficiaries. It’s likely that your spouse was named as the beneficiary for many of your accounts and policies. Forgetting to change that after your divorce can cause major problems for the people you actually want to inherit your assets later on.
Working out your finances after divorce is not always easy. It is, however, necessary, and taking things one step at a time can help make sure you get back on your feet quickly.
Source: Daily Finance, “5 Tasks to Help You Start to Rebound Financially Post-Divorce,” Hank Coleman, April 29, 2014