After a divorce, you may end up with one source of income that can make it challenging to make ends meet. You also might have to pay child support or receive child support that doesn't cover the expenses that come with raising children. I reached out to divorce attorneys and business leaders for their best advice on how you can survive financially after a divorce. From getting another source of income to seeking support from family, there are several tips that may help you best manage your money.
Managing your Money After a Divorce
Find Another Source of Income
Your financial capability will surely drop after a divorce. Unlike before, you have to adjust your budget according to how much you earn for yourself. Regarding this, adding another source of income would help you handle and manage your struggling financial capability.
You can get a side gig or a part-time job that wouldn't coincide and affect your main job and put yourself at risk. An added source of income will also help you build your own credit and start saving.
- Paw Vej, Financer.com Ltd
Focus on Self Preservation
For anyone who's getting a divorce, my top advice is to always start with closing any joint accounts. Your goal is to keep any assets you have that are your own money, and the last thing you want is for someone to withdraw everything you have.
For that reason, it's best to have your own separate account as soon as possible and close any joint ones so you have complete control of what goes in or comes out of your account, with no fear of unknown purchases or withdrawals.
This also minimizes any chances of someone taking more money from your account, which could result in the loss of your funds and the potential to owe the bank some hefty overdraft fees.
To protect what you own, you need to ensure no one has any access to your accounts but you. Divorce is already expensive as it is, so you need to protect the money you currently have.
- Andrei Vasilescu, DontPayFull
Take Control of Your Finances
After a divorce, the one thing that affects the separating couple is the finances. The soon-to-be-ex couple often fails to figure out their budget and finances post-divorce. It is very understandable since they go through an emotional phase. Yet, they should collect themselves as soon as possible and manage their budget. They should cut off their unnecessary expenses until they are in complete control of their budget.
- Natalie Maximets, Online Divorce
Create a New Budget
Once you have control of your finances, sit down and create a new budget to track your expenses. Take into account all payments (child support, alimony) that you are responsible for now and all streams of income you have as a single person. You can see where you may be spending unnecessarily and how to allocate these funds to your debts and payments. Try to write out all of your expenses for one month to get a better perspective on your situation.
- Riley Adams, CPA, Young and the Invested
Request a Mortgage Modification
Surviving financially after a divorce is difficult but not impossible: a mortgage modification with your housing lender may be an avenue to consider if you are seeking lower interest rates or reducing your current payments, and refinancing is not an option.
Lenders are not obligated to renegotiate your loan terms, so be prepared to show evidence of hardship whether you contact the lender directly or work with a third party. Should you engage with a settlement company, do your research to avoid onerous fees and scammers. A few items you may need as a part of this process include proof of income, tax documents, bank statements, and a letter to the lender describing the nature of your hardship. Local housing agencies also may offer financial education resources or pro bono services from qualified financial counselors to help you evaluate options before approaching your lender with a mortgage modification request.
- Russell Lieberman, Altan Insights
Seek Support From Family and Friends
One tip for surviving financially after a divorce is to ensure that you have support from family and friends and a solid budget. This budget should include all of your necessary expenses and any debts that you may have. Additionally, it is important to start saving for your future so that unexpected financial costs do not catch you off guard. Finally, it is important to seek out support from friends or family members who may be able to help you through this difficult time.
- Brian Meiggs, My Millennial Guide