Personal finances after divorce can be a difficult adjustment, especially if you are unfamiliar with handling your own finances. You are individually responsible for budgeting your finances and planning for the future. Making financial decisions as an individual requires different considerations than when you are married. Your divorce settlement can set you up for financial stability after divorce, but you will also need to make several adjustments that reflect your individual status.
Your living expenses will change after your divorce because your individual income must pay for costs that you once shared with your spouse. You may also have new expenses, such as if you are responsible for paying spousal maintenance. Even if you receive monthly maintenance payments, your budget will likely be tighter than when you were married. You may need to reconsider how you budget your expenses, such as whether you:
- Are paying for unnecessary services;
- Can downsize to a smaller home; or
- Can find cheaper ways to pay for your basic needs.
When determining your monthly budget after a divorce, you may need to account for the additional expense of paying for your own benefits plans. Your health insurance can be the biggest change because spouses are often covered by the same family plan. If you were part of your spouse’s health insurance, you will need to find your own provider. The easiest way is if your employer provides insurance, though that will be an additional expense taken out of your pay. If you do not have access to an employee health plan, you can explore the individual market.
One way to help with your budget is increasing the amount of money you make. You should consider opportunities for career advancement, such as:
- Working towards a promotion at your job;
- Looking for a better-paying job; or
- Continuing your education to qualify for better jobs.
You need to manage your budget so you can still afford to save money for emergency purposes and retirement. You may receive a share of your former spouse’s retirement benefits, depending on how long you were married and the terms of your divorce settlement. However, you should also save money on your own so you are not relying on your former spouse after retirement. A financial planner can advise you on ways to invest your money that can pay short-term and long-term dividends.
Money and Divorce
A well-negotiated divorce settlement can support you while you make the adjustments needed to become financially independent. A Kane County divorce attorney at Van Larson Law, P.C., can lead you through the negotiation process. To schedule a consultation, call 630-879-9090.