Going through a divorce can be a very troubling time. Aside from the emotional strain it can put you under, it also forces you to confront your new financial situation. Once you’ve been through the process of dividing up your money and other assets, you’ll a start a new chapter of complete financial freedom. While navigating finances during a divorce, many people seek legal support from specialist divorce financial settlement solicitors to ensure both parties get a fair outcome.
Going from years of handling finances as a team to suddenly having to take on this role yourself can be daunting. Fortunately, there are some steps you can take to ease yourself in.
Assessing your financial situation
Start by making a list of all your assets and liabilities. Creating a list can work wonders when you’re faced with a new challenge like this.
Having a clear overview of your current financial situation means compiling everything in one place. In your list, you should cover not only your income and savings, but also your expenses and any outstanding debt you might have.
Setting new financial goals
Once you have this clarity, it can help you prioritise your finances more strategically. For example, you may want to focus on repaying any outstanding debt or save up for something, such as a car or a mortgage. Everybody’s priorities will look different.
Setting new financial goals is an effective way to embrace financial autonomy. It can keep you accountable and give you something to work towards. Having said this, be sure to keep any goals realistic, otherwise you might feel deflated if there’s no sense of achievement.
Budgeting and expense management
Budgeting is a big part of meeting your financial goals, so it’s worth taking the time to get a handle on how much you’d like to spend and save each month. There are plenty of free budget planning tools online to help you get started. These encourage you to consider all areas of your spending and income to create a more accurate picture of your financial situation.
When looking at your expenses and outgoings, see whether there are any beneficial changes you can make. Can you cancel unnecessary subscriptions? Can you shop around for a better phone contract? Simple changes often make more difference than you might expect. Where possible, try to track your spending using finance apps to improve overall visibility.
Building an emergency fund
Building an emergency fund is a precautionary act that could help your future self when faced with financially tricky situations.
For example, your boiler might break or you could face redundancy at work. Either way, an emergency fund means you have a cushion to fall back on when faced with unexpected expenses or events.
Rebuilding credit
Having a healthy credit score is an important part of being financial independent. Without one, you may not be able to access certain loans, such as a mortgage. Simple steps such as checking your credit report for any errors and paying your bills on time can help to boost it over time. Reducing any debt can also help. You’ll need to show good management of revolving and instalment credit.
If you need legal support to settle your finances when going through a divorce, you can seek help from specialist divorce financial settlement lawyers so that you can move forward with confidence and with a clearer view to what this new chapter will look like for your finances.