The cost of food has risen. The housing market remains unpredictable- values soaring and values crashing. The cost of gas has gone sky high, with no end in sight. Consumers have experienced a significant drop in purchasing power. So, how can a weak economy impact your divorce?
It can be an added stressor if you’re not financially prepared for your new economic reality: a single income. And you need to quickly assess how far your income will go in today’s economic climate. You need to be prepared to weather the storm. If you’re going through a divorce, the following are a few tips on how to get through the financial storm:
INVESTMENT ACCOUNTS: Many people have watched their retirement/investment accounts drop in value. What does this mean to you? This could delay your retirement plans. Work with your financial advisor to see what you can do to reduce your loss and stay on track with your retirement plans.
EMPLOYMENT: Employment security can be in question. You think you have job security. But that may be further from the truth than you think. Businesses are laying off staff and closing their doors in record numbers. When you’re at work, keep your divorce conversation low key. You don’t want management to think you’re unable to perform effectively because of divorce drama.
SUPPLEMENTING YOUR INCOME: Prepare a realistic budget for your new single income status. Perhaps you may need to consider seeking a part time job to supplement your first income. Leave enough room in your new budget for unexpected expenses.
WATCH YOUR SPENDING: Don’t make unnecessary major purchases. Be mindful about how you’re spending your money. After the divorce you may need transportation. But it doesn’t mean you need a new car. And of course, you need a place to live after the divorce. But it doesn’t mean you need to put yourself in a position of being rent or mortgage poor.
MANAGE YOUR COSTS: Review your cell service plan, cable service, subscriptions, memberships, club memberships, gym memberships, and other monthly spending. Ask yourself if these are necessary expenses, or just extra spending you can live without.
DOWNSIZING: If you had “toys” such as boats, motorcycles, campers, and snowmobiles during your marriage, you need to carefully contemplate your ability to afford them after your divorce. Not only do they cost money to purchase, but they cost money to maintain and use them. It may no longer be reasonable for you in your new single status to keep recreational vehicles that you and your spouse purchased while married.
LEARN TO COOK: Dining out can be considered a luxury. And even if you say I only go out for fast food, frequent trips to fast food restaurants can add up to thousands of dollars a year.
COFFEE: Learn to make your own coffee! Spending $5 cup for a cup of coffee five times a week equals $1200 a year. What else could you do with an additional $1200 a year?
TAX CONSEQUENCES: You need to review your tax withholding and estimate tax payments for any necessary adjustments which may need to be made to reflect your new single status. Contact your accountant or talk to your human resources department to make sure you are paying taxes at your new single status.
PROVIDING SOLUTIONS FOR FAMILIES. GRAND RAPIDS COLLABORATIVE DIVORCE ATTORNEY SERVING KENT, OTTAWA, AND ALLEGAN COUNTY.
At Schmitt Law, PLLC, we understand that filing for divorce can be an emotional and confusing experience. And we understand the negative impact a divorce can have on financial security. That’s why we are committed to providing personalized service to each client we represent, and will be with you through this difficult journey. At Schmitt Law, PLLC we encourage clients to take a more collaborative approach to divorce that promotes positive communication and cooperation. Through mediation or the collaborative divorce process, Laurie guides her clients through amicable divorce settlements so they can move forward with their life. To discuss your circumstances and legal options, contact Schmitt Law, PLLC at (616) 608-4634 to schedule a consultation. Or contact us online to arrange a consultation.