Divorce rates are higher than they've ever been before. In fact, approximately 827,000 divorces occur every year. But despite their prevalence, divorces can be extremely difficult, both emotionally and financially. Couples may end their marriage for a number of reasons -- from domestic violence disputes, which is an assault that occurs between those in a domestic relationship, to adultery, to simply falling out of love, divorces can happen slowly or rather quickly. But how can you recover financially after going through a divorce? Let's explore a few tips to help you get on your feet after a divorce.
Decide What Is Essential
After a marriage ends, each individual partner may be dealing with decreased income, new bills, and even debt. And with a Chapter 7 bankruptcy remaining on your credit report for 10 years, you want to do whatever possible to keep afloat. This is why it's important for you to cut out unnecessary expenses and really focus on only what you absolutely need. These essentials include things like food, clothing, and your home. Focusing on only these few things, for the time being, can help you stabilize your finances. And only when you are able to afford the essentials, get yourself out of debt, and feel comfortable with your financial situation should you focus on non-essential spending. Doing this will help ensure you're safe and have the things you truly need.
Take a Closer Look at Your Accounts
Both individual and shared accounts need to be evaluated very carefully after a divorce. While certain accounts may not be able to be used for financial stability, they still need to be looked at. Checking accounts, college funds, retirement funds, and all other accounts should be split accordingly during the divorce -- which means you need to take a look at what money is actually in your name. Meeting with a financial advisor can be beneficial in figuring out which money should go into which account. In doing this, you can ensure your money is being saved wisely and you fully understand the details of each account.
Consider Your Goals
You may easily lose sight of your goals after a divorce, which is completely normal. But eventually, you're going to have to reconsider your goals, especially ones that involve finances. Whether it's deciding what you want to do after retirement, any career changes you want to make, or even going back to school, you need to figure this stuff out now. Even something like buying property, which may cost you around 0.5% of the home's purchase price for insurance, could significantly impact your financial situation. Taking a hard look at what you want in life will help you plan your finances accordingly. Now is the time to focus on yourgoals as a single person out in the world. While this may take some time and effort, deciding where you see yourself going in life will be beneficial. You can then start saving money as needed or open a whole new account.
Recovering after a divorce takes a lot of time and effort. But just know that following these tips and focusing on what you truly need and want in life will help pave the way for a better future.