Tips for bouncing back financially after divorce
Few events are more financially disruptive than a divorce. In the span of this one event, parties can lose half their pension acquired during their marriage and their home; they go from having two incomes to support one household to supporting themselves.
It might seem like such an event will be disastrous, and for some people, it can be. However, it need not be this way. In fact, a surprising 74 percent of people say they are the same or better off financially after divorce.
How is this possible?
The “Love and Money” survey asked married, committed, and divorced Canadians how they felt about finances. According to divorced respondents, most said they were optimistic about their financial situation. More specifically,
- 54 percent said they have an easier time managing finances.
- 57 percent said they are spending less than when they were married.
- 52 percent said they learned a new financial skill.
These responses indicate that people’s financial lives do not end with a divorce. Instead, the split can provide an opportunity to take control of spending and saving and learn how to manage money in a way that makes sense to the individual.
However, this does not necessarily happen overnight. It can take time and effort to bounce back financially.
What you can do to get back on track
No matter how much cash, property, and assets you have after divorce, managing it responsibly can be essential to recovering from a financially disruptive event.
One of the most critical steps to take is to assess your current financial situation and figure out a budget. Working with a financial professional can have short- and long-term benefits, such as preventing you from overspending and helping you adjust your retirement plans.
You can also work with a lawyer during the divorce to secure an accurate equalization of net family property as well as spousal support, if appropriate. These measures can build a solid financial foundation you can continue to build on long after the divorce.
Seeing the positives
It can be easy to get bogged down by the financial challenges and losses that coincide with divorce.
However, there may well be positives to consider, from having more control over your money to becoming more economically savvy. Embracing these opportunities can help you recover financially (and otherwise) after divorce.
