After any length of time in an unhappy marriage, divorce can feel like the start of a whole new way of being – but you still need to navigate your post-divorce finances carefully.
It’s not unusual for people to find that they’re struggling financially in their new circumstances. Here are some of the most common reasons for post-divorce financial distress:
1. Too much credit card use
You finally have your own space again – so it’s naturally tempting to fill it with things that you find reflective of your personality, especially if you felt constrained and repressed during your marriage. However, relying on credit to complete your home decor can be a recipe for disaster. It’s better to pay in cash or buy one major item on credit and pay it off before buying anything else so that you don’t end up with a pile of problematic debt.
2. Not understanding your budget
Both men and women experience a drop in household income after divorce (with women experiencing the most profound decrease), and it can take a while to adjust to your change in circumstances. If you don’t make a budget – and follow it – you can easily fall back into pre-divorce habits that are costly. A slight decrease in lifestyle is something you simply have to anticipate.
3. Forgetting about taxes
When you were married, you probably caught a tax break that you don’t have after your divorce. Make sure that you factor in your new tax situation (whether you’re filing singly or as head of household, and what sort of deductions you now have for your dependents) into account when you’re making your post-divorce budget – and don’t forget to update your withholding.
If you find that you cannot obtain solid financial footing after your divorce because the income and debts you’re left with just won’t balance out, help is available. Bankruptcy can allow you to wipe your financial slate clean and move forward.
