Click to listen to The Best Financial Strategy People Use in a Separation or Divorce
When people divorce, the biggest worry is about money and how financial assets will be split. Divorcing is never easy and is an extremely emotional time for couples. According to Stats Canada, approximately 5 million Canadians separated or divorced within the last 20 years and often times children were involved which makes the situation even more sensitive. In 2011, for the first time in Canadian history, there were more single-person households than couple households with children. If you are going through a divorce, use these tips to help yourself financially.
Do your Financial Homework
It is very important to know what financial assets you have and the value of those assets. This includes everything from investments to bank accounts, as well as future pensions. You are entitled to know about your spouses’ benefit plan, so make sure you look into current benefits and find out if there is a pension plan prepared. Make copies of your most recent tax returns and look them over. Reviewing your tax returns will not only show your income and taxes paid but also assets, capital gains and losses. You want to be able to recognize a fair offer – you don’t want to settle for too little or reject a reasonable offer- so educate yourself financially.
Budgeting and Your Personal Financial Situation
Once you have educated yourself and taken a look at your personal financial situation, it’s time to create a budget. In each stage of the divorce process- the beginning, middle, and after the divorce, your budget will most likely be different. Lifestyles do change when you divorce. Prepare yourself for the post-divorce lifestyle change by figuring out what your long-term needs will be and making a budget. A Financial Divorce Specialist can assist by helping to gather financial information and then provide scenarios for your future.
Making Informed Decisions When Going Through a Divorce
Education is key when going through a divorce – don’t let your emotions rule. You need to make informed decisions about your future leave your feelings out of it. Divorce is a very difficult time for couples because emotions are running high, and the worry of money is a very real concern. Use the financial information you’ve gathered and use facts and figures to help you, not emotions.
Understand your Disposable Income After Divorce
You may receive different types of income after divorce – employment earnings, spousal, or child support, but to fully understand the impact of a proposed divorce settlement, you need to know how much money you will have each month. Calculating your net disposal income is important to help create your budget and to understand your new financial reality after divorce. If you are considering separation or divorce, contact a Financial Divorce Specialist for a strategy session. They can help alleviate some fears and empower people who are going through separation or divorce by taking a look at the facts and figures of their financial situation.