Divorce Can Mean New Beginnings in Your Financial Life

Divorce Can Mean New Beginnings in Your Financial Life

There’s that old cliché about the Chinese symbol being the same for both ‘crisis’ and ‘opportunity’.  This rings true in divorce as well; there are a variety of endings, but also new beginnings.  While you may not be in the frame of mind to embrace the notion of new opportunities, this life-event may indeed be a good time to hit the “re-set” button, particularly with your finances and especially as we’re about to begin a New Year.

hen we speak with clients about their finances and changing their financial behavior patterns to help them reach their objectives, a large deterrent is the human tendency to stay within one’s comfort zone.  As financial planners, we’re more “financial therapists” than planners at times since understanding what’s going on inside the client’s mind may be required to help them move forward with the prescribed financial plan.

As painful and emotionally-draining as divorce might be, it may offer a superb opportunity to reflect, reassess and make decisions about what you really want out of your life and how you might accomplish these objectives.  Consider these probabilities.  With divorce, your household situation will most likely change significantly – you may have a different home, a new town, or certainly have one less member of the family around the household; (your ex).  Household dynamics will certainly change to some degree and familiar patterns are changing already.

Most likely, there will have to be some adjustments to lifestyle as well.  Since divorce often results in establishing two households instead of the previous one, the former-family income(s) may not be enough to sustain the previous lifestyle for both.  Some compromises may have to be made, resulting in prioritizing which expense are, in fact, necessary and which are actually not.

The asset division between spouses that often accompanies divorce also ushers in new realities.  Previously, “our assets-investments” were working toward a common goal.  Assets that end up on your side of the division split are for you individually and new decisions must be made as to how these assets should be utilized for your future life.

Which brings up another point, especially for divorcing women.   For the most part, women tend to be organizers and planners.  When married couples call our office for general financial planning, the catalyst for the meeting tends to be the wife, who decides that “winging it” with their financial future is not a plan and not a good idea.  With divorce, women often feel more comfortable with the idea of getting their new life organized, looking at multiple options, accepting advice or counseling, and making sound financial decisions based on logical and thoughtful planning.

Divorce often results in a feeling of new empowerment for a woman.  No longer co-dependent on her husband’s opinion, income or financial acumen, divorced women eventually experience a sense of freedom to move forward in a way that feels right for them.  That empowerment can strengthen with a go-forward plan to achieve her personal financial goals.

This is where we find our work as divorce financial analysts and planners to be particularly effective.  When income and asset division considerations and alternative possibilities are demonstrated in the graphs and spreadsheets we create in our analysis reports, clients (and even their attorneys or spouses) can see whether such new financial situations may work out or not.  Insights gleaned from such analysis can go a long way in helping divorcing women see their new possibilities and begin to rebuild their lives in the future.

Whether you are considering divorce or in the midst of the divorce, knowing the potential implications of the divorce settlement should be helpful in seeing the possibilities for your future.  If you already divorced and facing a New Year, having a financial plan that starts you with the right foot forward is a great way to start your new life ahead.

Read other articles we have published in the Rhode Island Women’s Journal, http://www.womensjournals.com or contact us via our Contact Us page to receive other free articles and information about divorce finance and planning.