In most marriages, one person tends to handle the bills, the bank account and the budget, if there is one. When a marriage ends in divorce, it can be a scary wakeup call for the other spouse. That’s especially true if the spouse who didn’t monitor the finances is being left with the house, which means they will suddenly be in charge of the mortgage, home insurance and a long list of utility and repair bills.
That doesn’t mean you aren’t up to the task. With divorce come a lot of life lessons, so why not make personal finance one of them? Here are some things you’ll need to get a handle on:
1. How to spend: “Budget” doesn’t have to be a dirty word. Think of it as a guideline for what money is coming in and what’s going out, and something you can use to track your spending. Many newly divorced people whose incomes are suddenly split in half find themselves in a panic, but a budget can help you decide where to cut back, if necessary.
2. How to save: Again, this could be tough if your household income has been reduced. But shoot for a goal of saving 10 percent of what comes in — you get to decide whether that’s before or after taxes. Having a little extra for emergencies will make you more confident in handling future financial challenges.
3. How to invest: Here’s where it pays to seek out a financial adviser, especially if you’re not financially savvy. Many advisers cater to women specifically, or even women in transition. Don’t hesitate to do a little shopping until you find one who understands your situation.
4. How to pay taxes: Divorce can throw a wrench into your tax preparation, so look for a tax preparer who’s well-versed in divorce and all its complications. It never hurts to ask people you trust who prepares their taxes.
Money stirs up emotions just as a broken relationship does. You may feel afraid or apprehensive now, but remember that knowledge is power. Once you get a handle your finances, you’ll not only feel more confident, but unlike in your marriage, you’ll also know exactly where your money is going.
Source: The Huffington Post, “What Your Ex Didn’t Tell You About Money That You Need To Know,” Honoree Corder, March 21, 2012