How the newly-single woman can stay financially fit
Q – I am going through a divorce, and I know I need to take charge of my financial future. But I have no idea where to start. Can you help? – Marcia L., Winnipeg, Manitoba
A – First of all, don’t fret! As a newly-single, post-divorce woman, you can achieve financial empowerment! After a divorce, your life will be different. First, you will need to deal with the emotional roller coaster. Then you will need to take charge of your personal finances – to ensure much-needed stability now and into the future. I know this can be a real minefield, with everyone giving advice, from lawyers to mothers, much of it confusing, contradictory, and emotionally charged. Time for a time-out!
The starting point is to acknowledge that a divorced woman’s financial needs are now very different from when she was married. From now on, it’s up to you to pay the bills, plan for children’s education, and manage investment and retirement savings. To say nothing of balancing income and expenses, while paying off debts, like mortgages.
So get it together, and get down to business. Here are the essential steps you’ll need to take to get your financial life together:
1. Find and track important documents
These include, most importantly, documents relating to ownership of real property, investments, and bank accounts, both here and abroad. Originals of wills, powers of attorney, trusts, and so on should be tracked down. Your lawyer will probably already cover all of this, but it’s always wise to do a double-check. In addition, having this information at hand will give you a head start on the rest of the financial planning you have to do.
2. Create lists of itemized assets and liabilities
What do you own, both jointly and individually? This includes not only your principal residence, but any other real estate, like a cottage or timeshare. Same goes for investments, including funds held in Tax-Free Savings Accounts, Registered Retirement Savings Plans, Registered Education Savings Plans, Registered Retirement Income Funds, and any non-registered brokerage accounts, both full-service and self-directed.
Of course, the other side of the coin is what you owe, both jointly and individually. This includes mortgages, car loans and leases, lines of credit, credit card balances, personal loans, and so on.
3. Assess sources of income and expenses
Income from employment or self-employment, a business, a trust, investments, all should be counted. Itemize and detail all your ongoing expenses, both short-term daily living expenses and longer-term recurring expenses, like taxes, loan and mortgage payments.
Get expert help
It should by now be clear that you’ll need something more than a back-of-the-envelope basic budget here. I recommend that you enlist the help of a financial advisor holding the Certified Financial Planner (CFP) designation.
Look for one who has experience in navigating the special challenges of financial planning during and after a divorce. She’ll be able to help you navigate the immediate next steps and help set you on a path to recovery, both emotionally and financially. This involves not only getting a handle on your immediate financial situation, but starting to plan for the divorce settlement when it comes. Great peace of mind comes with the knowledge that your financial affairs are in order.
© 2014 by Robyn K. Thompson. All rights reserved. Reproduction without permission is prohibited.