Divorce can take a toll on more than just your emotions. It can also impact your finances.
Therefore, you should understand the strategies that can help you get back on track financially.
Assess Your Finances and Create a Budget
Like the 989,518 couples who divorced in 2022, your first step in post-divorce financial recovery should include assessing their financial situation. Calculate your assets, debts, income and expenses. Then, list all your monthly expenses and compare them to your income. Look for areas where you can cut back if you need extra money for savings or debt repayment. Stick to your budget to maintain your financial stability. Then, set your financial goals
Build an Emergency Fund and Repay Debt
An emergency fund protects your finances from unexpected expenses. Save at least three to six months’ worth of living expenses in an easily accessible account.
If you acquired debt during your marriage, start paying it off. Prioritize high-interest debt and work your way down. Making extra payments can help you pay off debt faster and save on interest in the long run.
Invest in Your Future
Divorce may have put a dent in your retirement savings, so start rebuilding. Contribute to your employer’s retirement plan, such as a 401(k) or IRA, and consult with a financial advisor to develop an investment strategy tailored to your goals.
Explore Additional Sources of Income
Increasing your income can accelerate your financial recovery. Look for opportunities to earn extra money, such as pursuing a side hustle or freelance work. You may also invest in education or training to advance your career.
Prioritize your well-being during this challenging time. Take care of yourself physically, emotionally and mentally. Surround yourself with supportive friends and family, and don’t hesitate to seek professional help if needed.