Many individuals facing divorce may not have a solid grasp on what it looks like to achieve financial stability on their own. And many, if they ever supported their lifestyle on their own accord, may have simply forgotten how. Whatever your situation, there will be financial impacts of your divorce that may last years. Knowing the extent of these potential impacts may help you prepare for them.
According to a study by Fidelity Investments, over one-third of 1,107 surveyed adults claimed they had not achieved financial recovery after five years following their divorce. The study also found that around 60% of individuals who took an active part of the marriage’s financial planning claimed to be in good shape after the divorce. Unfortunately, only half of those surveyed who did not take part in the marriage’s financial planning found stability.
Start budgeting as soon as possible
Taking time to budget ahead of time and anticipate expenses post-divorce can be a great help. There are many factors to consider. For one, there will be legal fees. These fees, of course, will vary depending on the length of the divorce and whether you settle your affairs out-of-court. Many lawyers will be happy to help with negotiations and other methods that can keep you from a trial.
Anticipating repayment of marital debts is also vital, as they will likely become the responsibility of both parties. You may also want to close your joint credit accounts ahead of time to prevent additional spending.
Now that there will be more bills to consider, with ex-spouses living separately and bearing more financial responsibilities, family needs will likely take a hit. If you have children, factoring in support options as well as future education and living expenses are of utmost importance and you may want to prioritize them in your divorce arrangements.
There could be a light at the end of the tunnel, though. While many may struggle going forward financially post-divorce, the previously mentioned study also found that many of the surveyed individuals took charge of their finances and that those who remarried became more proactive in their marriage’s financial management.