Starting over with nothing after divorce. OK, so it happened. It’s all over. She, he, they, as it turned out, was not the one. In fact, they were a bit of a **** (fill in the blank).
We’ll take it as read that the lawyers or councillors have done what they need to do and you have got what your share is.
Of course, it could mean that you got half or even more of everything. But half of nothing is still nothing. Divorce, when you are broke, just means you are broke on your own now.
So now that you are starting over with nothing after divorce what now.
I guess you have to start again. Here are a few key ideas and actions you can consider to recover financially after a divorce.
Take this marriage thing seriously – it has to last all the way to the divorce.
What does a good life look like after divorce?
If you’re trying to get somewhere, it’s generally good to know where it is your trying to get to. You need to have a vision of what a good life looks like. With this, you can then start building towards it.
What would a basic, leisurely and luxury lifestyle look like?
What would you be living in and on? What would you be eating? Where would you be going on holiday? Who would you be mixing with, and what would you be doing with them? What would your hobbies be?
And what might all of this cost?
Can you estimate or guess or guesstimate?
Don’t forget, though when you are pricing this up the difference between needs and wants. You need food, water, shelter and the occasional break, but you don’t need long-haul holidays, latest gadgets and a new car. These are just things you want.
Distinguishing between needs and wants might be the difference between reaching and not reaching your goals.
Once you have these figures, you know where you are trying to get to. You have a target.
Now its time to figure out where you are starting from and how far you might be from it and what you need to do to get there asap.
“You know why divorces are so expensive? Because they’re worth it.”
How do you survive financially after divorce?
Well, it’s probably a good time to review where you are. Are you really at zero a bit above or even below zero with debt?
If you are struggling financially after divorce, it’s probably best to steady the ship and see where you are taking in water, if you are expecting any rough seas ahead – enough of the sailing metaphors.
You need to figure out where you are right now. What are you currently worth? How much money is coming and going out? Paint a picture of what a good life looks like now and use all this info to figure out how to afford life after divorce.
My mother always said, don’t marry for money, divorce for money.
How do I rebuild after divorce?
Take stock of where you are financially right now.
Gather the data to see how good, bad or ugly it is.
List all your assets (I know, you said you had nothing) and all your liabilities (or debts).
Assets will be any savings, investments, pensions if you own a house or part-own one now and add all these up.
If you have debts, list them in terms of which ones are the most expensive like to be those with the highest interest rates. This will probably be debts like credit cards, store cards and car loans.
Now you have your assets and debts listed you can see where you are starting from.
Get yourself a paper file or online file to list and detail your current financial position.
“Instead of getting married again, I’m just going to find a woman I don’t like and give her a house.”
Draft a getting out of debt plan
Having a plan to get out of debt is like to be a good idea.
Two common ways to deal with debt are the snowball or avalanche methods. Both involved making the minimum payments on all debts but then:
For the snowball method, you pick the smallest debt and pay it off as quickly as you can. Then moving on to the next smallest debt and so on.
For the avalanche, you pick the one with the highest interest rate and pay that down as fast as you can then move onto the next highest and so on until they are all gone.
“The happiest time of anyone’s life is just after the first divorce.”
John Kenneth Galbraith
Do you know where your money goes?
Yep, I know you probably don’t want to hear it, but you probably need a budget. You need to understand where all your money is going.
Where your money is coming from could well be relatively simple, a job or two some maintenance if you are lucky.
It’s where your money is going that provides a more detailed picture of what you are currently prioritising and how quickly you might run out of it.
You can do it old school by writing down everything you spend and or collecting your receipts and entering into spreadsheets, or you can use a banking app.
Lots of banking apps after a bit of setting up help you analyse in almost real-time where your money is going.
“The only time my wife and I had a simultaneous orgasm was when the judge signed the divorce papers.”
How to afford life after divorce
Well if you want to avoid poverty after divorce, you might need to tighten your belt for a while.
Frugality aye? That sounds like fun.
It’s a lot more fun than further financial problems after divorce due to overspending.
Now there is only one income you might find you need to be a little more frugal in the way you use your money.
Set up a spending plan (a cunning way to avoid saying BUDGET), where you detail where you want your money to go, track it and review it every day, week month to see if things are under control and on track.
Living within your means is a lot more fun than creating even more debt after divorce. OK creating debt might be fun, but like any party, it’s the actual or moral hangover that causes the pain.
Probably better to stop digging while you are already in a hole.
“Marriage is the chief cause of divorce.”
Maybe you need to hold back on all the things “you” really wanted while you recover after the separation.
Start rebuilding your finances with an emergency fund. 3 to 6 months’ worth of expenses to ride out any storm, car or house repairs, loss of job and global pandemic’s those sorts of things.
Having this emergency fund in place will help prevent you from going into debt, and trying to cover the costs of something going wrong.
Remember an emergency fund is an emergency. Get on with building one
“When you’re a monk, you’re not allowed to have sex with anyone. When you’re married, it’s one person. That’s one more than a monk. It’s not that different.”
What should I update after divorce?
Here are a few ideas for you to think through. Think of it as a divorce checklist. A bit like a Christmas list but potentially a lot darker or brighter depending on your outlook.
If you’re changing your name and or trying to decouple financially, then you might need to inform or change a few of the things below.
Here are a few things to think about
- Driver’s license
- Phones, utilities, internet and other subscription services.
- Updating all your banks and other financial accounts
- Credit cards – yep they still want their money back
- Mortgages and other debts
- Student loans – from when you were young and full of hope
- Insurance policies – so they cover the right person
- Your work – especially any benefits you had like death in service that you don’t want going to a certain you know who now!
- Your will, who do you want your WHAM posters to go to now?
- Voter registration
- Your local council for local taxes etc.
If you have a more complicated setup, i.e. kids, joint assets and liabilities etc. it’s probably a good idea to get professional advice.
You may also want to look at your credit score and figure out if or how you want to separate yourself financially in the eyes of the credit agencies.
“He taught me housekeeping; when I divorce, I keep the house.”
Zsa Zsa Gabor
Summary: Starting over with nothing after divorce.
Figure out what success looks like after divorce. Figure out what a basic, leisurely and luxury lifestyle might cost and start budgeting, saving and investing towards it.
Figure out what you have got. Make a list of everything you own and owe.
Figure out where it is all going. Set up a budget and monitor where your money is going. Adjust as necessary to live within your means.
Get a debt plan. Figure out what you are going to do with your debt and how you are going to manage it.
Build an emergency fund. Get 3-6 months of expenses saved for the next rainy day—Cos it’s coming.
Update your details. Who do you need to tell that it’s just you now, change details and separate your records?
Starting over with nothing after divorce is not going to be easy but with a few clear steps, you can start to rebuild for a brighter financial future.
First, it’s important to remember that you are not alone. According to the latest statistics, one in every four marriages ends in divorce. So you’re definitely not the only person who’s going through this.
There are a lot of things you can do to cope financially after divorce. Here are a few tips:
1)Get financially organised and take control of your money
2) Review your budget and make adjustments.
3) Reach out to family and friends for help and support.
4) Take advantage of free or low-cost counseling and financial planning services.
5) Take some time to be clear on what good looks like now
6) Automate as much of your saving and investing as much as you can
This is tricky question to answer, as the financial recovery process after divorce will vary depending on several factors, such as the couple’s overall financial situation, the division of assets, and each individual’s personal circumstances. However, there are some general guidelines that can provide a framework for understanding how long it may take to recover financially from divorce.
For instance, if a couple has significant assets and/or property to divide between them, the financial recovery process may take longer than if the couple has fewer assets. Additionally, if either party experiences problems with employment or income after the divorce, this can also prolong the financial recovery process. Ultimately, however, most experts agree that it generally takes two to five years to reach some level of financial stability.
The financial split in a divorce is typically 50/50. This means that each person gets half of the marital assets and half of the marital debts. There are some exceptions to this rule, such as when one spouse is awarded sole custody of the children or when one spouse earns significantly more than the other. But in general, the 50/50 split is pretty common.
If you’re considering leaving your husband but can’t afford it, there are a few things you need to do first. Get a handle on your finances. This will help you determine how much money you’ll need to support yourself. Then, start saving as much money as you can. Even if it’s just a little bit each week, it will add up over time. Think about ways to increase your income. Can you get a better paying job? Start a side hustle? Lastly seek the advice of professional counsellors to help you in your situation.
There are many different types of financial assistance available to those who have recently separated from their spouses. The best way to find out what help you may be eligible for is to speak with an experienced family law attorney or accountant. Some of the most common forms of financial assistance after separation include
-Spousal support/maintenance: This is generally paid by the higher-earning spouse to the lower-earning spouse and is meant to help them maintain their standard of living. The amount and duration of spousal support is determined based on a number of factors, including each spouse’s income, earning potential, health, and custody arrangement.
-Child support: This is paid by the non-custodial parent to the custodial parent and is meant to help cover the costs of raising the child. The amount of child support is determined based on a number of factors, including each parent’s income, the number of children, and the custody arrangement.
-Property division: In many separations, the biggest financial issue is dividing upthe couple’s assets and debts. This can be a very complex process, especially if the couple has a lot of property or if there is disagreement about who should get what.
-Taxes: Separating couples often have to deal with a number of tax-related issues, such as who will claim the children as dependents and how to file taxes if they are now living in different locations.
– Insurance: Health insurance is often one of the biggest concerns for separating couples. If you were dependent on your spouse’s health insurance, you may be able to continue coverage under their plan for a period of time. Alternatively, you may be eligible for government-sponsored health insurance, such as Medicaid or CHIP.
In most of these cases, you will need to speak with an experienced attorney/accountant and or lawyer/attorney to find out what options are available to you.
In most cases, both parties are still liable for the mortgage during and even after divorcing. This means that if one spouse doesn’t make the payments, the other spouse will still be held responsible. Sometimes, however, the court may order one spouse to pay the entire mortgage if the other spouse can’t afford it or if there is a large disparity in incomes. If you’re facing this situation, it’s important to speak with an experienced attorney who can help you understand your rights and options.
Financial life Coaching and Planning
- Is your life and financial admin in a mess?
- One or two months away from financial disaster?
- Not enough time or money to achieve what’s most important to you?
- No idea how to plan, save and invest to become financially secure?
What’s likely to be the outcome if you don’t make some serious plans and changes sooner than later?
Without clarity and control of your day to day finances, worry and anxiety are likely to continue.
Financial coaching and life planning will give you the support, guidance, and accountability you need to succeed with money and life building your savings and wealth after divorce.
- Get you financially organised
- Build your savings cushion for when things go wrong
- Help you figure out how much money is enough
- Help you understand and build wealth to never run out of money
Start building your money confidence now because waiting will only make it more expensive and painful to achieve later.
Plan, build and enjoy your money.
Taking you from life and financial crisis to happiness.
Contact us here for a chat about rebuilding your money confidence after divorce and what options you might have for creating wealth in every area of your life.