Going through the process of getting a divorce can be mentally and emotionally draining. But what many Americans may not realize is how expensive it can be to legally end a marriage. As Business Insider cites, the average U.S. divorce ends up costing about $15,000 per person. This figure accounts for attorney fees, filing costs, mediations, evaluations and other relevant expenses. Of course, the exact price tag could be even higher depending on the specifics of the situation.
Dealing with debt after a divorce can make it much tougher to get the fresh start you deserve. Here are some tips for rebuilding your financial future following a divorce.
Take a Financial Inventory
The first step is taking inventory of your financial situation without judgement. Where you may have gotten used to handling finances jointly throughout your marriage, now it’s time to evaluate your personal finances. Although this step can seem daunting, it will help you lay the foundation for the rest of the financial decisions you make moving forward. In other words, don’t skip it.
One strategy to consider here is having one spreadsheet for income, one for expenses (both fixed and variable) and another for assets and liabilities.
As one psychologist writes for Entrepreneur, “It’s astonishing how empowering it is to have one place to go when we feel stressed and need an overview of our finances.”
Write Down Your New Goals
The entire divorce process requires a lot of reorientation and change. For example, you may find your goals and priorities are different post-divorce than they were during marriage — and so your approach to financing them will be, too.
Take stock of your new goals, including estimates of how much they’ll cost and your timeline for completing them. Then you can decide how to best budget and save to make them a reality. You may need to set up some new accounts to hold your savings, then automate transfers from your checking account to ensure you stay on track to meet them over time.
Long-term goals may do best in a Certificate of Deposit (CD) offering competitive interest returns in exchange for your commitment of leaving your money in the account for a set period of time. High-interest online savings accounts can also help you earn higher-than-average returns on your savings. Your emergency fund, on the other hand, will do better in a traditional savings account that’s easy to access and requires no minimum amount of funds to reside within. Meeting with your bank or credit union can help you decide how to restructure your approach to banking following a divorce.
Explore Debt Relief Options
If you find yourself facing serious debt after the dust from the divorce settles, it may be time to look into various debt relief options available to you. For instance, some Freedom Debt Relief reviews cite divorce as one of the hardships that has led people to enroll in a debt settlement program with the goal of negotiating what they owe down.
It’s worth doing more research on debt consolidation, management and settlement if you’re struggling with unsecured debt — like credit card bills or medical expenses. Even something simple like transferring the balance from a credit card with high interest to one with zero interest for an introductory period can help ensure your monthly payments start chipping away at the actual balance rather than covering exorbitant interest.
When in doubt, schedule a free meeting with a credit counselor at a non-profit agency. These professionals are trained to help people budget effectively, access financial literacy resources and come up with a plan to address debts.
Rebuilding your financial future after a divorce may seem intimidating, but these straightforward steps will help you take control and make progress toward your goals.
*This post contains collaborative content.