Divorce is emotionally challenging, but it also brings significant financial changes that require careful planning to help you to rebuild financial stability and secure your financial future.
Below are some steps you should take during and after your divorce to protect your finances.
1. Negotiate during divorce proceedings
During your divorce settlement you should prioritise negotiation fair financial agreements and make sure your interests are taking into account when dividing assets. You need to consider possible child support and also dividing pensions fairly. You should focus on making sure that the settlement aligns with your short and long term financial goals.
2. Consult a financial adviser
Many people only consider seeking legal advice when they are getting divorced, however speaking to a financial adviser before the divorce is complete could provide you with valuable insights and financial analysis to help you create a comprehensive financial plan tailored to your individual circumstances.
Book a no-obligation meeting online now or call us on 0117 973 0500.
3. Understand your new income and outgoings
After your divorce has been finalised, the first step to managing your finances after you get divorced is to thoroughly assess and understand your new financial position. It is likely that your income will have dropped as you now only have one household income instead of two. It is also possible that your outgoings may have increased as your household bills such as electric and gas may be similar amounts to what they were before but now you have to pay all of them not half.
You should note down your income each month, including any child support or additional benefits you may now find you are entitled to.
You should then go through all of your outgoings each month and understand your ‘essential’ expenditure such as housing, council tax and electricity. You should then note down your ‘discretionary’ expenditure such as eating out, gym or tv memberships. It may be that when you look at your new income, you might need to cut some of your ‘discretionary’ expenditure. This will then allow you to prioritise saving for emergencies and putting money towards your long-term financial goals.
A financial adviser at Four Wealth Management can help you to create a realistic budget. Book a no-obligation meeting online now or call us on 0117 973 0500.
4. Update financial documents
You should make sure to update all of your financial documents such as your bank accounts, investment accounts and insurance policies with your new martial status. You might need to change your beneficiaries on certain policies. It is also important that you update your Will as soon as possible.
You should establish financial independence by making sure you have a new bank account and savings accounts in your name only in order to build up your credit score.
5. Protect your assets
It is important that you minimise financial risks after divorce. You should look into appropriate protection policies such as life insurance, health insurance and income protection cover in case you were unable to work. If you are now the only individual providing the household income, income protection and critical illness cover are more important than before.
Take control of your finances
Taking control of your finances empowers you to make informed decisions and build a secure financial future.
A financial adviser at Four Wealth Management can help you to rebuild your finances after divorce. Book a no-obligation meeting online now or call us on 0117 973 0500.
Will writing involves referral to a service that is separate and distinct to those offered by St. James’s Place. Wills are not regulated by the Financial Conduct Authority.
