WOMEN: TAKE CONTROL OF YOUR FINANCES AFTER A DIVORCE
It’s been a while
I’m not who I was before
You look surprised
Your words don’t burn me anymore
Been meanin’ to tell ya
But I guess it’s clear to see
Don’t be mad It’s just a brand new kinda me
Can’t be bad I found a brand new kinda free
– “Brand New Me” by Alicia Keys
As we gear up for the summer wedding season, I recently have spent many hours working with a few newly divorced women helping them pick up their respective financial pieces and get them on the road to financial independence.
Each of the women told me that their ex-husbands used the “You’ll never make it without me” line, and it was such a devastating thing to hear, they are using it to as motivation to get their finances on track and become financially independent for the first times in their adult lives.
For many divorced women, their new financial reality can be intimidating. The need to coordinate a multitude of professionals, including accountants, lawyers, financial advisers and insurance agents, often means running themselves ragged as they are doing this while trying to hold down a job and raise the children. The family law lawyers located in San Marcos is whom you can contact to get help with splitting amicably.
Here are some money tips for women having gone or going through a divorce:
Take stock
The first thing a divorcee needs to do is get her hands around the budget. This is the first step toward financial empowerment. By doing this relatively simple exercise, many clients have told me, they feel they gained a level of financial control they never assumed they would have. Whether you kept a budget while married or not isn’t relevant. You are going to have a whole new set of expenses and will probably have different sources and levels of income than you had previously. Break your expenses down to those that are monthly and those that are annual, one-time expenses. Once you have that organized, write down all of your various sources of income, salary, child support, etc.
What’s important in budgeting is to let your income drive your expenses. This means that once you know how much money enters your bank account each month, create a budget that limits your spending to the amount of income you have. While this seems basic, most individuals let their expenses drive the process, meaning that they spend money without discipline and hope that at the end of the month they don’t go into overdraft. The pre settlement funding services is something you can have a look at when it comes to sorting your finances.
Understanding your budget can also play a major part in the asset division during your divorce proceedings. A well-known family-law expert recently told me much aggravation and time would be saved if women knew how much money they needed to live off of. With this information, women can avoid spending years and thousands of dollars fighting for every last penny. If you know how much you need to live, you’ll know how much money to ask for.
Invest lump sums
As part of a divorce settlement, many women come into large lump sums of money and have no idea of what to do with it. It’s important that this money is used to help meet any financial goals that you may have. If after doing your budget you see that you will need more income to make ends meet, then you will want to make sure your money is invested in a way that can maximize the amount of income produced, while preserving or even growing your portfolio.
Take charge
As Alicia Keys sings, this new situation is actually therapeutic. According to family mediator Kathleen O’Connell Corcoran, PhD: “After divorce, women experience less stress and better adjustment in general than do men. The reasons for this are that (1) women are more likely to notice marital problems and to feel relief when such problems end, (2) women are more likely than men to rely on social support systems and help from others, and (3) women are more likely to experience an increase in self-esteem when they divorce and add new roles to their lives.”
Use this new found independence and take control of your new financial reality. Speak with a financial adviser and create a plan that will enable you to get on with your life and be financially independent.
The information contained in this article reflects the opinion of the author and not necessarily the opinion of Portfolio Resources Group, Inc. or its affiliates.
Aaron Katsman is author of the book Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing (McGraw-Hill), and is a licensed financial professional both in the United States and Israel, and helps people who open investment accounts in the United States. Securities are offered through Portfolio Resources Group, Inc. (www.prginc.net). Member FINRA, SIPC, MSRB, SIFMA. For more information, visit www.aaronkatsman.com or email aaron@lighthousecapital.co.il.
