A signed divorce agreement marks the beginning of a new chapter; one that will require both a secure financial foundation in the short-term and a disciplined approach to the long-term. If you’re in the throes of a divorce, do yourself a favor and think about the long-term financial picture. All too often, I have seen clients throw their financial acumen out the window once they have a signed divorce settlement in hand. Stay tuned to your financial needs even after the divorce is finalized to avoid these common financial mistakes many women make once they’re single again:
1. Footloose and Budget-Free:
As the old adage reminds us, “She who fails to plan, plans to fail.” A budget helps keep your finances grounded in reality and keeps your spending under control.
Sure, in the heat of the moment, you may get some fleeting satisfaction from racking up huge balances on your ex’s credit card. But, resist the urge. At the end of the day, YOU will be entirely responsible for footing the bill—and may very well be in violation of your divorce settlement agreement, as well.
3. Millionaire Makeover:
No one wants to deny you a little post-divorce pampering. I’m just asking that you only treat yourself to what you can afford. A short vacation may well be within your budget. But, are you sure you can afford something more elaborate, such as plastic surgery? Think twice about investing in expensive procedures that are motivated solely by vengeance or insecurity.
Your primary post-divorce objective should be to make your divorce settlement last as long as possible while achieving your various goals and desires.
4. Oops! I Forgot:
Once your divorce is finalized, remember to remove your husband’s name from assets (titles, deeds, credit card accounts, etc.) that you now own. If you haven’t done so already, be sure to update wills, medical directives and all beneficiary designations on all your retirement accounts. If you don’t, your ex-husband could be eligible for a portion of those funds!
5. The Rebound Guy:
Dating after divorce can be an important step towards creating a new future. However, many newly-divorced women jump into relationships too fast, and then end up making poor financial decisions as a result. Do you really have enough money to pay for your new boyfriend’s plane ticket/new suit/golf club membership? Do you want to loan money to someone you just met? (No, you don’t!)
Divorce isn’t easy. But, once the process is finalized, you can turn the page to start a new future. Keep that future bright by protecting your assets and implementing a sound long-term financial plan. Your primary post-divorce objective should be to make your divorce settlement last as long as possible while achieving your various goals and desires. Many divorce financial planners help their clients post-divorce with budgeting, retirement planning, college savings, asset protection, insurance, estate planning, and all other investment needs.
For more advice on navigating the finances of getting divorced, visit Women & Co., Citi’s personal finance resource for women.
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