Going through a divorce can trigger a landslide of changes in your life, especially financially. Navigating the changes in your finances the right way can prevent ongoing and unnecessary loss.
When you know how to protect your money during a volatile time, you can maintain more control over your financial well-being despite the circumstances.
Separate your finances
Stepping away from your spouse from a financial standpoint can require great courage, especially if your spouse assumed the role of breadwinner. Despite the uncertainty, the sooner you can separate your finances, the better. Set up a personal bank account and remove your spouse as an authorized user on shared credit cards. Start thinking about how you will manage financial independence.
Prioritize your budget
Budgeting will be your new best friend during a divorce. According to CNBC, there are financial factors to consider prior to divorce including the following:
- Food
- Housing
- Transportation
- Health
- Dependent care
- Savings
The expenditures you prioritize will most likely change as you adapt to a single income and more financial responsibility.
Focus on saving
Once you get back on your feet, commit to saving money where you can. Cut back on unnecessary expenses and determine how much money you can reasonably save each month. Gradually, as your wealth rebuilds, you may have more funds to contribute to a savings plan. Once you reach this point, you might want to consider ways to diversify your savings, such as investing, so you can build compound interest.
Your diligence in protecting your money can help you move past your divorce with excitement and confidence in the future.