There are many consequences of getting a divorce in Michigan. One consequence overlooked by some individuals is the financial consequences of a divorce. Transitioning from one household to two separate households can be difficult. The couple now has to pay twice as much to support the family as it did when they were living under the same roof. Our Michigan divorce attorneys understand the financial challenges faced by newly divorced individuals. Below are seven tips that can help you prepare for financial stability after a divorce.
Seven Tips for Financial Stability and Success After Your Divorce
1. Make a list of long-term goals
Long-term goals help you develop short-term goals and steps to achieve those goals. Having long-term goals encourages you to develop strategies and visualize a road map for attaining those goals. For instance, preparing for retirement encourages you to take steps now, such as opening a retirement account, setting up automatic drafts from your paycheck, and taking steps to pay off your mortgage sooner.
2. Create and live within a budget
You cannot manage your finances successfully unless you know how much money you have coming in and how much money you spend each month. Creating a budget helps you cut unnecessary expenses and adjust costs to help you reach your long-term and short-term goals. Budgeting programs such as Quicken or Mint can help track expenses and track daily spending habits that can sabotage your finances.
3. Avoid incurring new debt
It can be difficult setting up another household without incurring some debt. Therefore, begin saving money now that you can use to establish another home after your divorce. Paying down debt can help improve your credit rating and avoid financial problems in the future.
4. Automate your savingsIf you do not contribute to a savings account each pay period, now is the time to start. Open a savings account that is not tied to your checking account or your debit card. Deposit a set amount into the savings account each pay period for emergencies. When an emergency arises, you will not need to incur debt because you have money in your savings account to cover the unexpected expense.
5. Live within your new means
This tip is one of the most difficult tips to incorporate. You may be accustomed to a certain standard of living, but it may be impossible to continue that standard of living after your divorce. You may return to that standard of living in the future and even exceed that standard of living, but for now, you must learn to live within your new means. Utilize a budget and avoid credit to help keep you on the path to financial wellbeing after a divorce.
6. Monitor your credit reports
After your divorce, you may need to monitor your credit reports to ensure that your ex-spouse's debts are no longer linked to your credit profile. You can order copies of your credit reports online once each year free of charge, but this might not be sufficient to monitor your credit report if your ex-spouse was heavily indebted or ordered to pay certain joint debts. You may want to invest in a credit monitoring service that notifies you if new debts are added to your account or an account becomes past due because of nonpayment.
7. Meet with a financial planner
A financial planner can help you identify financial goals and develop a path for reaching those goals. You can also discuss various methods for investing your savings and retirement plans to increase income and maximize your efforts for building your net worth.
Contact a Michigan Divorce Attorney for Help
If you are contemplating a divorce, the best way to prepare is to discuss your legal rights and options with a Michigan divorce attorney as soon as possible. Contact Michigan divorce attorney Cameron C. Goulding today. We can help you develop a strategy and take steps to protect yourself and your children as you begin the divorce process.