Divorce and its financial challenges are an issue almost no
woman wants to face. After all, during divorce proceedings, not
only is a woman considering the financial future of herself and
her family, but she’s also dealing with the emotional aftermath
of the dissolution of a marriage. It can be a difficult time for
everyone involved, and a messy financial situation will only
make things worse.

Unfortunately, no matter how mutual or cut-and-dry the legal
proceedings of a divorce are, there are complications when it
comes to short-term and long-term finances. The best thing women
can do to prepare themselves is to take financial issues one
step at a time, working with an advisor they trust to help them
start looking ahead to a brighter future.

After Divorce: The First Steps

Once everything has been divided up, it is necessary to re-title
or transfer all of the “big ticket” items, including property,
houses, cars, wills, insurance, credit cards, and bank accounts.
It’s important to get these things out of the way first since
you don’t want to be held liable for any delinquent payments or
unaccounted spending on behalf of your ex-spouse. The same is
true for any issues related to bankruptcy; if there is a chance
of either partner filing, it’s important to do it either before
the divorce occurs or very soon thereafter. That’s because it is
possible for one ex-spouse’s bankruptcy to affect the other’s
financial situation, since he or she may be held liable for
defaulted loans.

Along these same lines, it’s important to amend existing
retirement plans, including IRAs and 401(k) accounts. When
possible, these should be a part of the divorce settlement,
since they incorporate a very large portion (if not all) of your
financial future as far as retirement goes.

After Divorce: Looking Ahead

Getting your finances settled after a divorce can take years.
Not only are most women adjusting to a new home and new income,
but many of them are also figuring out how to balance work and
child care as well. This means that you may not consider
yourself ready to start planning a savings and retirement plan
until five or ten years have gone by and you are on your feet,
so to speak.

This is a mistake. Although you might not have the funds ready
to start investing right away, it’s always best to at least meet
with a financial advisor who can help you determine your goals
and next steps. Whether you want to set a retirement plan into
action or find a way to build a savings account that will give
you – and your newly emerged family – some freedom from
financial worries, it’s always best to start right away.

Although there are rarely very many silver linings to a divorce,
it does give many women a chance to start taking proactive
control over their future. Sure, it may take a few years before
you start to feel settled enough to really tackle stocks, bonds,
risk assessments, and portfolio diversification, but divorced
women are among those best suited for smart financial decisions
- if only because they’re being forced to ask the hard questions
and take a good look at what they want out of their lives.

About the author:

Author: Wesley Watkis
Questions? Email – wesley@thewandwgroup.com and visit our website at http://www.thewandwgroup.com – New Money Talk is a weekly article focusing on retirement, personal finance, and estate planning. Comments and questions are welcome, but because of the volume of email, personal responses are not always possible.

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