Regaining financial independence is as easy as 1-2-3
Although it may not feel like it while it’s happening, you can achieve financial empowerment after a divorce. But you will need to take charge of your personal finances, even if you haven’t been accustomed to doing so in the past. This can be a minefield, with everyone giving advice, much of it contradictory or incomprehensible. So step back from all the noise, and follow a few basic financial planning techniques.
Your financial needs will be different
First, you have to acknowledge that a divorced woman’s financial needs are very different from when she was married. You have to pay the bills, plan savings, and manage investment and retirement accounts. To say nothing of balancing income and expenses, while paying off debts, like mortgages.
To make this work, you need to get organized, with the following checklist:
- Important documents. These include papers related to ownership of property, investments, and bank accounts, wills, powers of attorney, trusts, and so on. Your lawyer will be a big help here.
- What you own, what you owe. List what you own, both jointly and individually, including principal residence and any other real estate, like a cottage or timeshare. Itemize investments, and include Tax-Free Savings Accounts, Registered Retirement Savings Plans, Registered Education Savings Plans, Registered Retirement Income Funds, and non-registered brokerage accounts, both full-service and self-directed. Itemize all outstanding loans and debts.
- Assess income and expenses. Add up employment or business income and detail all your ongoing expenses, including taxes, loan and mortgage payments.
Once you’ve got a handle on your current situation, you can start thinking about new financial objectives for yourself and creating a plan for achieving them.
To make this process a bit easier, you might use some off-the-shelf personal financial software. But remember, this has a steep learning curve. So if all this is starting to sound overwhelming, you might consider the services of a Certified Financial Planner – a professional who’s trained to consult, advise on, and solve all types of financial problems, and who specializes in bringing order out of financial chaos.
After the upheaval of a divorce, your aim is to get on your feet and stay there. These first basic steps will help you towards full financial empowerment and independence.
© 2015 by Robyn K. Thompson. All rights reserved. Reproduction without permission is prohibited. This article is for information only and is not intended as personal investment or financial advice.