Financial Fresh Starts: Navigating Money Matters After a Divorce
Divorce is a transformative, often tumultuous journey that touches every aspect of your life.
And it invariably brings financial changes that can feel overwhelming.
As a CERTIFIED FINANCIAL PLANNER™, I take pride in helping to guide newly single women through the financial intricacies that come with the end of a marriage.
Asset Division: The First Crucial Step
One of the biggest challenges of a divorce is deciding how assets will be divided. But it’s not as simple as halving everything down the middle. Joint assets can include real estate, retirement accounts and even debt. A great starting point here is an open and honest discussion with your financial advisor to understand your current position and future needs. I strongly recommend seeking professional advice when tackling this complex task. Know the laws in your state, as some have community property rules, which can affect how assets are distributed.
Managing Joint Debts: Don’t Ignore the Elephant in the Room
When a marriage ends, joint debts don't magically disappear. For example, you may have a home mortgage or credit card debt. Both parties are typically responsible for paying off these debts, and failure to do so can significantly impact your credit score. It's imperative to negotiate how debts will be paid off and consider refinancing options. We also typically recommend taking immediate action to separate joint accounts to prevent any additional shared liabilities.
Updating Beneficiaries: A Small Step with Big Implications
An often overlooked aspect is updating your beneficiaries. It can be unsettling to think that your ex-spouse may still be the beneficiary on your retirement and insurance accounts. These designations supersede what's in your will, so it's crucial to make these changes as soon as possible. Get in touch with your financial institutions and complete the necessary paperwork to protect your assets and wishes.
Establishing Your Individual Financial Identity: The Road to Independence
Gaining financial independence is crucial. After a divorce, we highly recommend pausing to reevaluate your income, expenses and investment strategies. Building your credit as a single woman is essential for future financial dealings like getting a loan or buying a property. Open accounts in your own name, create a budget that aligns with your new lifestyle and continue contributing to retirement accounts.
Navigating the financial challenges post-divorce can be daunting, but remember, knowledge is power. Making the time and a plan to educate yourself and seek professional advice is critical. This is a journey that you don't have to go through alone. From asset division to establishing your own financial identity, each step you take is a move toward financial independence and confidence.
Remember: you have the strength and resources to navigate through this. It's never too late to take control of your financial future. Empower yourself with knowledge and you'll find that the path to financial independence may not be as daunting as it seems.
Please Note: Raymond James and its advisors do not offer legal advice. Please discuss legal matters with the appropriate professional.