Divorce can have a range of negative effects on a person. Financial instability is just one serious consequence that can haunt you for many years after your separation. In this case, it’s crucial that you take the proper steps to boost income and increase savings. Entrepreneur recommends the following tips for people struggling financially after they’re divorced.
Get a handle on your finances
Are you aware of your income-to-debt ratio? If not, now is a good time to figure it out. Take a thorough accounting of your complete financial situation. Once this has been established it will be easier for you to make the necessary changes. For instance, maybe you’re spending too much on eating out or entertainment. Making cuts to these areas will free up money for necessary expenses, such as groceries and paying bills.
Once you take inventory, prioritize your finances in a way that makes sense. For instance, if you’re saving up to buy a new vehicle create a savings account for that express purpose. If you’re having issues paying bills, look for ways to boost your income so you can stay afloat. This will provide you with a solid financial plan, which will help you navigate obstacles and spend less on things you don’t need.
Revisit financial accounts
If your ex-spouse is listed as a beneficiary on life insurance policies or retirement accounts, it’s time for an update. If not, you run the risk of proceeds from these accounts going to the wrong person. Even if you make your wishes known in a will, it might still not be enough to prevent your ex from getting these assets after you’re gone. Make updating your estate plan an important aspect of post-divorce financial recovery.