It’s one of the most difficult experiences to go through, but almost half of married couples in the United States find themselves facing divorce. Whether your divorce is amicable or acrimonious, in most cases just getting through can feel like a marathon.
Before we look at what you can do to organize yourself financially, I wanted to share some suggestions on mental and physical preparedness. In addition to divorce being an emotional time and experience, it also can feel like a full-time job. It’s important for you to keep yourself not only mentally healthy but also physically healthy during this trying time. Maintaining your mental and physical health can help keep your stress at bay. Keeping your mind and body as strong as possible will tremendously help with the process.
A couple of my important suggestions are:
- Continue to do things that relieve your stress. If you work out, don’t stop! Continue running or going to the gym. If you love going to Orange Theory or barre classes, keep up with your classes. Perhaps try yoga and meditation. Continue a healthy diet, take your vitamins, and monitor your alcohol intake. Your body is counting on you to be strong!
- Identify your support system. These people may be your best friends, closest family members, and/or professional help such as a therapist. Your support system is made up of people who should support you no matter what and will help you and listen to you during what may seem like the darkest of days. These are your tried-and-true people that you feel comfortable calling every day if need be and will always be there for you.
Assemble Your Professional Divorce Team
In addition to your personal emotional support system, it is critical to assemble a team of professionals who you trust will assist you to the very best of their abilities during these times. Your professional team should consist of the following:
- Divorce Attorney– Obviously this person is going to be the head of your team. When looking for a divorce attorney, I suggest interviewing at least three individuals to see with whom you groove best and who you believe has your best interest at heart. It could be helpful to find a referral from a friend who has already had a good experience with the attorney.
- Financial Advisor– Consult with a financial advisor to help determine your financial needs post-divorce. This advisor is someone who can assist you with budgeting and determining your monthly and annual needs, taking all your expenses into account, and perhaps uncovering some expenses that you didn’t consider. These numbers will be crucial when your divorce attorney is negotiating your case. Post-divorce this advisor can assist with your overall financial and retirement planning.
- CPA– There are many of us who don’t entirely understand the ins and outs of our income taxes and/or what we can expect in terms of property taxes or taxes we pay on investments. It’s helpful to have a CPA analyze your situation so that you don’t have a surprise tax bill at the end of the year that creates unnecessary stress.
Gather Financial Information
The information that will be required by your divorce attorney may seem overwhelming and time consuming to gather. However, having all the necessary information ahead of time will help you with your financial life moving forward. The following list includes some of the high priority information that will be required and should be a helpful checklist:
- Income: If you currently work, you will be asked for detailed information and documentation of your pay information including base pay, tips, commission, etc. You will likely be required to provide documentation of the last three to five years of earnings.
- Secondary earnings: You will be asked if there is any secondary income coming in. This can include and is not limited to rental property income, income from a private investment, Social Security, pensions, investment portfolio income, etc.
- Expenses: Putting together an exhaustive list of all (yes, ALL!) of your expenses will likely be required. This may very well be the most important information to gather. Try not to leave any stone unturned as your expenses will have a largely material impact on the funds that you may receive as either child support or alimony or both. Such expenses range from everything as obvious as your mortgage or rent payment to home insurance, life insurance, car payments, car insurance HOA fees, utilities, groceries, club memberships, gym memberships, as well as all expenses related to the children and their expenses including day care, medical care, and extracurricular activities.
- Financial assets: Your financial assets will include everything that you own of worth and supporting documentation of said worth. To begin, this will include your home, second home (if applicable) and vehicles, including cars, boats, RVs, golf carts, etc. These assets will include your checking and savings accounts, investment accounts including both after tax brokerage accounts and retirement accounts including 401(k)s, 403(b)s, IRAs, and Inherited IRAs, pension accounts, annuities, trusts, CDs, stock held outside of an investment account etc.
Your divorce attorney will give you a complete checklist of all the documentation that you will be required to provide. I suggest trying to provide this information in bite size pieces as it can be quite overwhelming. The best-case scenario is that you have much of this information at your fingertips which I discuss in my previous article.
Determine How Much You Need
Don’t leave any stone unturned. For women who have primarily relied on their ex-husbands to pay the bills and handle most of the financial aspects of life, this is a very important time to make sure that you have absolute clarity on your overall financial situation. Now that you have gathered the above information, it’s time to analyze and review with a fine-tooth comb so that you can determine how much money you need monthly and annually to live the life that you are accustomed to. I suggest sitting down with a financial advisor during this time who can help you create a budget and assist with uncovering potential expenses that you may not have thought about. It may also be a good time to determine how much you can spend on a new home if you are moving out of the married home and to think ahead to expenses you may have for your children including college and sports. Walking through every part of your financial life with an advisor will ensure that you can create an overall financial plan that will suit your needs.
Gain Your Financial Independence
There will be situations whereby your financial situation post-divorce may seem stressful and sometimes downright scary. If you haven’t been in the workforce for many years and need to return to the workforce due to these circumstances, this time of life may be a blessing in disguise! If it seems scary, try to turn those thoughts around and consider the power and control you feel with this newfound financial independence. This time may even present a new opportunity to reinvent yourself.
There is so much support for women in mid-life who find themselves thrown into a new way of life. From podcasts to blogs to books by amazing women (and men!), there are innumerable resources and support. It may be a temporary phase until you become involved with someone and fall in love again, but I encourage every woman to find their own sense of financial independence during this time.
This information is provided to you as a resource for informational purposes only and is not to be viewed as investment advice or recommendations. This information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. This information is not intended to, and should not, form a primary basis for any investment decision that you may make. Always consult your own legal, tax, or investment advisor before making any investment/tax/estate/financial planning considerations or decisions. The views and opinions expressed are for educational purposes only as of the date of production/writing and may change without notice at any time based on numerous factors, such as market or other conditions.