Like many aspects of divorce, managing your finances after splitting up with your spouse can feel complicated and overwhelming, here is a basic primer to help you navigate your finances independently from your ex-spouse.

 

Adjust your budget to match your current lifestyle. Start by calculating your new monthly income, including spousal or child support, if applicable, and estimate what you expect to earn over the next year. 

 

Next, look at spending to see if you need to make adjustments. Whether you’ve decided to remain in your home or find something else, crunch the numbers to see how much house you can realistically afford. Evaluate your lifestyle spending to see if it’s necessary to trim your expenses. If possible, avoid making any major purchases until you feel comfortable with your updated budget. 

 

Consider your children’s future. If you have children, they will understandably take priority in your planning. It’s important to start thinking about how you’ll handle future financial milestones: paying for private school, college tuition, the down payment on a home, or a wedding. If you’d like to help your children with such expenses, consider these questions: Will you receive financial support from your former spouse? Do you expect your kids to contribute? As each event approaches, be up front with your kids about what you can afford so they can set realistic expectations. 

 

Prioritize saving for retirement. No matter how close-or far-you are to retirement, prioritize updating your retirement goals and continue building your nest egg. You are responsible for your own savings. While retirement saving can feel overwhelming as you balance competing financial priorities, having a plan can help you feel more in control. 

 

Ensure you’re protected. An important step following divorce is to maintain, replace or establish insurance that will help secure your financial future. All forms of insurance (health, life, disability) should be reviewed and considered, and your beneficiaries should be updated, if needed. Work quickly to establish an insurance plan to avoid the financial risk of being uninsured. 

 

Consider the tax implications of your new marital status. Divorce can affect your tax situation in several ways: including entering a different income tax bracket, providing or receiving child or spousal support, and changes to your investment strategy and your process for handling future tax returns. 

 

Dream and plan for the future. Once you have a handle on your new day-to-day finances and retirement goals, allow yourself to dream and plan for other milestones that are important to you. Whatever your dreams, determine the cost of each one so you know how much you’ll need to save. Save what you can each month, keeping in mind that even small amounts will add up over time. 

 

Don’t go it alone. Professional guidance from an attorney, tax pro, estate planner and financial advisor can help you make choices that match your new priorities. Financial advisors, like myself, advise clients on how to navigate with the complex decisions that arise during and after a divorce and offer strategies designed to help you meet new financial goals.