It is important to note that the cost to divorce is also a challenge.
According to the Jimenez Law Firm, “When it comes to the cost of divorce, an uncontested divorce will run you an average of $4,100 while the total average cost of divorce is closer to $13,000. When complications arise regarding child support or child custody, that number easily swells to almost $24,000. It is important to note that these are simply averages and that there are many outliers on either side of these averages.”
Here are some tips that can useful is resetting your new financial normal.
Looking at the present: Write down all monthly payments including mortgage or rent payments, loan or credit card repayments, utilities, daily needs such as food, transportation, retirement plans, bank balances, and school tuitions. Start to shift into thinking about what the future will look like. The first reality is a double income is not reducing to a single income home. Create a budget with the new income constraints and look at what you can afford or what you may have to do without until you are on better footing.
Should I stay or should I go?
If you want to stay in the home you shared, you might consider refinancing the home in your name and let the ex-keep a larger share of another asset to be equal. The current home may require investments such as maintenance and replacing items. If you decided to sell your home, see if the house is included in other person’s portion of the divorce settlement. Come up with the estimated realtor’s costs and subtract from the equity portion to be paid to the ex.
Retirement plans: Things can get dicey when dealing with money matters.
“If a plan participant gets divorced, his or her ex-spouse may become entitled to a portion of the participant’s retirement account balance. Depending on the type of plan and the amount of benefits, the ex-spouse may have immediate access to his or her portion of those assets or at some point in the future (usually upon the participant’s retirement or death). Most plans require an ex-spouse to file a Qualified Domestic Relations Order (QDRO) with the plan administrator before the plan can pay any portion of a participant’s retirement plan benefits to that ex-spouse,” according to the IRS.
Retirement accounts such as 401 (k)s or IRA are considered property that can be divided during a divorce. The best way to separate retirement accounts will depend on types of accounts, savings goals as well as the personal and financial circumstances of each party. The most common option for transferring funds from a 401 (k) account is known as qualified domestic relation order or QDRO (court order allowing the transfer and distribution of account funds)
Practice Self-care:
While you took a big step in forgiving your ex, they might feel differently or there is still some resentment and pain. The biggest thing you can do is do some self-care. Practice healthy habits such as eating well and working out. Get enough sleep and do activities that you enjoy. Most importantly seek support from friends, family, therapists and CDFA® professional to help get things on track.
