Going through a divorce is never easy. Divorces can be messy and stressful and a lot of the frustration comes from disagreements about the finances. After things have settled and you start getting back into a routine, you still have to deal with handling your finances on your own.
According to a UBS report, women are both living longer than their husbands, and 56% of women leave financial and investing decisions to their husbands. Whether it is because of death or divorce, eight out of every 10 women will at some point in their lives be fully responsible for handling their own finances.
While 56% is certainly a decrease from previous generations, it still is a large percentage. Ideally, households where the spouses work together on their financial situation could prevent a lot of heartache. However, when divorce happens, there is guidance we can provide on how to take control of your finances for the first time. At Trust Point, we work alongside women to help them make the right financial and investing decisions to make sure they continue to meet their financial objectives and feel secure in their future.
Here are our top tips for women who find themselves in control of their finances, maybe for the first time.
Get started right away, but wait to make big decisions.
It’s natural to be stressed out at the thought of trying to manage your day-to-day life after a significant life event. The key to staying in control is being assertive and confident when it comes to managing your finances. In order to do this, take an inventory of your assets and know what your cash flow needs are so that you have a better understanding of your situation. You may feel pressured and rushed to start making financial decisions. Slow down. Take your time. When it comes to these decisions, the best practice is to think through all of them, especially with an advisor you can trust.
1. Find a Trusted Financial Advisor
One way to alleviate the pressure you feel is to recognize that this isn’t something you need to go through on your own. Don’t try and get through it solely off of advice from friends and family. Financial service providers like Trust Point are experts when it comes to situations like this. There are a lot of details that are easy to overlook when it comes to getting your finances in order after a divorce, such as closing joint accounts and opening new ones, changing beneficiaries on insurance policies or wills, creating a new estate plan, and more.
2. Create a Budget and Stick to it
If you had any joint accounts or were liberal in terms of spending one another’s money during your marriage, then you need to learn to budget with the money that you make. If you don’t have much experience with budgeting, here are three things to keep in mind when creating your first budget:
- Identify why you want to create a budget: In this case, it is to be able to find financial freedom while learning to adjust to a single income household.
- Do a deep dive into current spending habits: What are you spending the most money on per week? What is necessary spending, and what are expenses that you can try and cut back on?
- Consider your financial goals: Do you still want to retire at a certain age? Or assist your kids in getting through college? Create some measurable goals that will motivate you to stick to your budget.
A budget is another aspect that a financial advisor can assist you in. Financial planning and budgeting may seem intimidating at first; however, most people find out that the process is actually quite enjoyable, as it gives them a new sense of control over their wealth.
3. Smart Investing Will Help Immensely
Investing your money is a great way to gain more financial freedom. If you’re sitting on extra cash in your account after the financial settlement following your divorce, it’s smart to hang onto it for the short term until you’ve adjusted to your new lifestyle. However, at some point, you may want to invest your money to help preserve and increase your wealth to help reach the financial goals that you’ve created. Investing can be intimidating for some. However, at Trust Point we will customize your plan and educate you along the way to ensure your feel the confidence in knowing where you stand and what to do to reach your goals.
When it comes to smart investing, you need to construct the right portfolio that takes into consideration how much money you will need to support your lifestyle, as well as the amount of risk you’re comfortable with. At Trust Point, through our portfolio construction and monitoring process, our investment professionals can help mitigate various risks, including market risk, interest rate risk, inflation risk, and more.
If you’re new to investing, start educating yourself on investments. Become familiar with investment fees, taxes, inflation, as well as the various asset classes and how they affect the portfolio risk. But know, we are always here to help.
Let Trust Point be your guide
For over 100 years, Trust Point has provided financial services and insights on a variety of wealth-related issues. As an independent financial company, we are committed to growing our clients’ wealth, and we’ll help you get through the aftermath of your divorce and restore your financial stability and confidence. Whatever goals you’re trying to achieve with your money, our team has the expertise and the experience to provide you with valuable guidance.
We believe that financial services should offer more than establishing financial goals. Don’t worry about your finances – let us handle that – while you focus on leading your best life. Contact us today to get started.