According to reports, many divorced women have a worse time making ends meet than men. Some academics and feminists have made several arguments to that effect. There is indeed more financial impact of divorce on women. Divorced women often face barriers to employment or are stuck in low-paying industries; some may even have to work two jobs to make ends meet. There is more to financial well-being than just money. Sometimes divorce finance settlements help but without it, women suffer most of the time. Yet it is clear that women's financial status declines the following divorce. If a woman's financial situation worsens, she is more likely to suffer feelings of poverty or have financial difficulties. Read further to learn how to recover financially after a divorce.
Ways to get through the Financial Impact of Divorce on Women
1. Maintain a Spreadsheet
Once the divorce is final, put all your assets and debts in order, including account numbers, creditor names, and balances. Change your ex's name on your investment and retirement accounts, insurance policies, will, and other estate plans. Take the necessary steps to remove your ex-spouse as an authorized user from any joint bank accounts or credit cards. It is one of the ways to decrease the financial impact of divorce on women.
2. Make a List of Expenses
Divorced women need to think about new costs, like health insurance, on top of the fact that living costs take a bigger chunk of one person's income than bills paid by two people. Children can stay on either parent's health insurance plan after a divorce. Divorce expert and Forbes contributor Jeff Landers says that an ex who was dependent on the other parent's plan may be eligible for COBRA benefits coverage temporarily. He also suggests planning to get their health insurance as soon as possible.
Take the time to write down all your monthly costs because even the smallest ones can add up now that you only have one income. List costs you may not have thought about before because they are "shared" costs for the house. Things like car insurance, internet, cell phone service, and more should be listed so you can get a clear picture of how much you spend. Be ready to think about what expenses might need to be cut to make room for things you need. A court may also require a spouse to get a life insurance policy to ensure that alimony or child support payments will continue if he or she dies. It is one of the important ways to get through the financial impact of divorce on women.
3. Find a Budgeting Strategy
Find out how much your new monthly payments will be for your home, car, utilities, child care, and any shared debts that were part of the divorce agreement. For example, Senator Elizabeth Warren suggests a 50/30/20 budget in her book, All Your Worth: The Ultimate Lifetime Money Plan.
It means that 50% of your monthly take-home pay goes to expenses you can't avoid, like housing, utilities, food, and loan payments. 30% goes to non-necessity expenses, like eating out, a gym membership, or a child's activities. And 20% goes to savings (including an emergency fund), retirement, or paying off debt faster. It is how to recover financially after a divorce. One may also take help from some of the best budget apps in the market.
4. Take Control
Whether you were the household CFO, you relied on your ex to handle the money, or you and your ex did it together, you are now in charge of your finances. To decrease the financial impact of divorce on women, you need to take control. Set up your checking and savings accounts and use digital banking tools. Also, keep track of everything going on with them. For example, you can pay bills online, deposit checks from your phone, and access and move money digitally whenever and however you want.
If you are not the main person in charge of your family's finances, don't forget to be kind to yourself., and don't forget that you can ask for help or guidance to better understand your financial situation. Use the help of the financial experts in your life, like your accountant, financial planner, and bank representative, to make the change.
5. Set New Financial Goals
Women may feel they need to fight for the family home, cars, and other property to have a "normal" life after the divorce. However, these things all cost money and get in the way of other goals that may be more important to them.
Set one short-term goal you can reach, like putting a certain amount of money from each paycheck into a savings account. It is to build up an emergency fund or put a certain amount into a brokerage account to help your money grow over time. As you progress and reach these small goals, you will feel more confident in your ability to control your financial future, no matter how much the divorce sets you back. It is among the important steps for divorcing women's finances.
There is no doubt about the fact that there is a huge financial impact of divorce on women. However, it does not have to hurt your finances or define your life. Focus on knowing where you are financially right now and where you want to be. After a divorce, it can feel overwhelming to be in charge of your financial future. However, your financial success is made up of small, consistent, and deliberate steps that will lead you to your goals. We thank you for staying till the end, and we hope you liked this article on divorce women's finances.