Divorce usually takes a huge toll on finances. First, it is a notoriously expensive process. Second, you must figure out how to disentangle your finances from your spouse’s. When the process is over, your personal finances may look totally different than they used to.
This is not necessarily a cause for concern. The period following a divorce is perfect for a fresh start, both romantically and financially. This is the time to reevaluate your finances as a newly single individual. When you are preparing your life after a divorce, there are a few important tips that you can use.
Make sure you have health insurance
Some divorcés are able to stay on their former spouse’s health insurance plan through COBRA. This option is available up to 36 months after a divorce. If this is your case, then make sure you have completed the relevant paperwork within 60 days of your divorce. If you miss the deadline, you may be kicked off your partner’s plan.
Plan your estate accordingly
You may wish to revisit your estate plan and adjust it as needed. For example, you may wish to remove your ex-spouse, in-laws and stepchildren as beneficiaries. If you have not yet created an estate plan, you should create one as soon as possible. Without one, your assets may go to your former spouse after your death—even if this is not what you want.
Take advantage of Social Security benefits
If you and your partner were married for at least 10 years, you may be eligible to receive Social Security benefits based on your ex’s earnings. Collecting these benefits does not deplete the benefits that your ex will receive. In fact, your ex need not even know that you are receiving benefits. That is private information between you and the Social Security department.
Create a budget
Your post-divorce lifestyle may be quite different from when you were married. Be sure to adjust your budget accordingly. This may mean tightening your belt and cutting back on a few things. It may also mean that you have more money to finance the lifestyle that you want. Whichever it is, your budget should reflect it.