Divorces sometimes are as financially debilitating as they are emotionally draining. But as difficult as ending a marriage can be, as many as 876,000 Americans deal with it each year. Though the recovery process, both emotionally and financially, might take time, it also gives you the opportunity to exercise your financial power and independence.
Separating emotions from financial decisions is the first step. Here are a few others:
Inventory your financial situation. As you assess your financial situation, pay close attention to your income, expenses and assets, taxes, as well as your future financial goals. Of course, all of your pre-divorce finances will change in order to maintain two separate households. But in order to determine what you have to spend after the divorce, you need to know what you were spending before the divorce.
Create a new financial plan. A financial plan is essential for financial stability, and peace-of-mind. List your income sources (work, alimony, child support, investments) so you know what your monthly and yearly budget should look like, and also what you should be saving for retirement.
Learn about your new tax situation. Contact a certified CPA to run a new tax projection based on your new income, assets, and deductions. Tax brackets often change after a divorce. It’s important to know as soon as possible whether you’ll need to change your withholding, or sell your investments.
Divorce is about the simultaneous end of one situation and the beginning of another. And while starting over can be a bit daunting, it can also be exciting and refreshing. Don’t let fear prevent you from implementing the type of financial planning that will guarantee a secure future and peace of mind. Our team is ready to help. Following these steps will ease your fears and set you on a more confident path forward.
Boris Benic and Associates has been providing accounting, tax and consulting services to entrepreneurial and middle-market businesses and the professionals that lead them, for 25 years. We pride ourselves on providing the same individualized and personal service of a small firm while delivering the quality and expertise of a large firm.