After the Divorce Settlement is Finalized: 8 Steps You Should Take
What to Do After Your Divorce Settlement is FinalIf you are struggling with bouncing back after your divorce settlement, we have the 8 key things you should do after it is finalized.
With all of the court fees, attorney costs, and other charges associated with divorce, the average cost of a divorce settlement hovers around $15,000. That's more than the average person's car is worth. If you're struggling to bounce back after paying up, you're not alone.
Then only thing that people rank as more stressful than divorce is the stress of moving. Depending on how your divorce went, you could be going through both right now. With all of that stress, you might be making some reckless financial decisions.
You should allow yourself some space to react to your divorce, but the last thing you need to do is end up in the poor house. Instead of getting stuck bouncing back from your divorce settlement, follow these 8 tips and you'll be back on top in no time.
1. Set Some Goals
Depending on where you live, you'll have a variety of possible short-term goals: find yourself, rebuild your social life, eventually think about dating. While these can vary and include different hurdles if you have kids or a shared business, there are some common long-term goals to think about.
You should make sure you're preparing for retirement. This divorce settlement could have depleted some of your savings.
If you're still in the home you were in during the marriage, you might want to get the mortgage paid off so that you can get that off your mind. Otherwise, you could be looking for another place?
Lastly, you probably have some dream you'd like to pursue now. Whether that means opening up your own shop or traveling to see the world, you should start putting money away for that right now.
Identifying and prioritizing your goals are the first step to achieving them. After they're identified, you can start putting together a plan to get you there. Based on your income, you might have to take baby steps to get to each one.
Every day that you're building toward a brighter future, you should be proud of yourself.
2. Automate Your Savings
With all of your goals laid out, you need a way to manage paying for each one. When you get your paycheck deposited into your account, it's easy to fudge your promises to yourself a little bit. You may have meant to put $150 in your travel account but if you put $50 in now, you can just put in an extra $100 later, right?
Better than leaving it up to your whims, see what your bank or the payroll department at your job can do to help you. Many employers offer direct deposit and will be willing to split up your check into multiple accounts.
This ensures that you'll get a certain amount into your savings, more into retirement, and get the rest into your checking for day-to-day use.
3. Don't Become A Control Freak
If you've got investments or stock, you might watch the news cycle and get overexcited one way or another. A sudden spike could make you want to buy or sell at the wrong time.
Don't worry about controlling every channel of your investments. You need to let them grow.
Worry about what you can control and focus on your immediate plans. Control the money you're making today and don't be so concerned with the money you could be making in 10 years.
4. Spend On Yourself
This doesn't mean you should go on a shopping spree. Instead, think of ways you can spend your money on what your needs are. If you're interested in furthering your education, pursue that.
At this stage in your career, you don't need to go into an ivy league program. Take some classes that fit in with your schedule where you feel like you'll learn the most.
Take courses or certification programs that will help you build your career prospects. Or else you could go with something different altogether.
If you've stared out the window of your office wishing you could become a licensed scuba diver, now is the time to try that out. The sky is the limit. Take this time to become the best version of you that you can be.
5. Stay In Your Lane
One of the biggest mistakes you can make is to live beyond your means. With your finances and assets in recovery mode, you could make decisions that are based on having a dual income.
If you're still paying off legal fees, paying for new expenses, and even still sending alimony to a spouse, you could be in a different situation than you were last year. Make sure your spending habits line up with where you're at now.
It might hard to adjust but it's important to stay within your new boundaries in order to reach your goals.
6. Manage Your Risk
A cash reserve that can cover 6 months of expenses in case of sudden job loss or a family emergency is a must for just about everyone. While this might seem out of reach in the short term, it can provide peace of mind.
Think about how you can create a dependable cushion through conserving your money and creating a slowly growing investment account for this purpose.
Everyone has a different "safe" number. Figure out what yours is and do whatever you can to get there.
7. Watch Your Portfolio
After your divorce, your investment portfolio could look a lot different. If you had shared accounts or mutual investments, you need to get them sorted.
Regularly review your portfolio and make sure that it stays aligned with your objectives. If you took a financial hit, you should change some of your accounts for a lower risk tolerance.
8. Reset Your Perspective
Don't fret over every penny you spend. You need to plan a head-clearing vacation, weekend off, or trip out of town.
Find a way to enjoy a few of your favorite sights, foods, or cultural events with a friend or two. Make sure you clear your head before you dive into the next phase of your life.
Start Fresh After Your Divorce Settlement
If you don't make some space to clear your head, you won't be able to make good financial decisions after your divorce settlement. Take some time to heal and make sure you've tied up all of your loose ends before you jump back in.
If you're looking for more tips on how to manage your finances after divorce, contact us.