Divorce can be frightening enough without factoring in additional financial burden.
Marissa Van Diest, a financial adviser at Carlson Financial spoke with News 3 about recovering from the financial blow that oftentimes comes with divorce.
One challenge people may see is expenses going up and income going down. The first step is to figure out what that change looks like and feels like. Put a freeze on all discretionary spending until you have a good grasp of the monthly budget. It might just be temporary, but hold off on buying things like clothes, eating out, entertainment for the time being, Diest said.
A newly single person should review their budget, savings, retirement, and other financial goals. Maybe someone was married to a spender and can now return to their frugal habits. Maybe they didn’t really handle the money in the marriage and this will be new for them. Just going through the exercise of budgeting can help them take back control of their money situation and gain greater confidence.
After setting a budget and getting familiar with everything it’s important to reassess financial goals because it’s likely the goals someone had while they were married will have changed, Diest said.
Set small targets for goals that you can achieve in a short amount of time and write them down. For example, instead of building a bank account up to pre-divorce levels, a goal might be to just get $1,000 in savings. Achieving smaller goals could empower someone to go after loftier goals.
A final suggestion Diest had was to not focusing solely on cutting expenses. Don’t be afraid to downsize – don’t let emotional attachment stand between you and a comfortable monthly payment. Then, get creative. Instead of the vacations you were used to, get a credit card with air miles to buy plane tickets and stay with friends or family to cut costs on hotels.