How to Recover Financially Following a Divorce

(Written By Co-op Student, Ore Anibaba)

It is without a doubt that going through a divorce can be very time-consuming for an individual. Nevertheless, it is important to not lose sight of other important factors of your life such as your financial well-being. While dealing with finances may not be the first priority on your mind, it is important to take care of your finances and adapt where needed in order to thrive after your divorce. This post discusses five different actions you can take to ensure a smooth financial recovery following a divorce.


1) Create a New Budget
One of the very first actions you should take after your divorce is finalized or even during your divorce is to create a new budget. Depending on your situation, going through a divorce could likely cause a significant decrease in your savings and earnings. To compensate for the new loss, you need to make a new plan on how you’re going to get back to the financial position you were in before the divorce. This could look like decreasing your weekly spending by eating out less, unsubscribing from subscriptions, or going out less.
Slowly but surely, these lifestyle changes will help you be able to save more money and get back on your feet.


2) Additional Source of Income
The financial burden of a divorce may influence you to find another extra stream of income. In a time where your finances have been decreased, having another stream of income will help limit the stress and burden of the loss. Finding an additional stream of income could
look like starting a side hustle such as a business or picking up a part-time job. Having another job is a great way to earn back some of your lost money in a reasonable amount of time, just be sure not to burn yourself out too much!


3) Relocating your Home
Living is one of the most significant and influential expenses an individual may deal with. Depending on your last living arrangement, it may be likely that you and your partner would both contribute to housing expenses. When you are separated from your partner and don’t have that joint income anymore, it may be a good idea to look for a new place to live, that is more within your means. Downsizing to a house or an apartment that is less expensive than your past home is another way to help you spend less money and build up your savings. In addition, relocating can also give you the opportunity to reside in a place where the cost of living is lower, thereby also aiding in more savings.

4) Prioritize Pressing Payments
During this tough period, it may be hard to think about paying off your expenses; however, it is important to think about it now rather than later. You’ll be benefiting yourself by ensuring that you pay off your debts and expenses that are nearing the due date or have high interest rates. These are the types of expenses you should prioritize paying as soon as you can. Yes, paying off your debts will make you spend money, but if you do it now rather than later, you’ll be saving yourself from the possibility of paying a lot more than you initially had to. By paying your debts on time or better yet early, you could be saving your future self from experiencing a worse financial burden.

5) Selling your Assets
Hopefully, it doesn’t come down to this; however, in some cases of desperation, you may need to sell some of the goods you own to get money back. This method of proceeding may be necessary if your expenses are due very soon and you don’t have enough money. It’s
important to understand that yes, selling some of your goods can be hard, but sometimes sacrifices need to be made in order for you to continue thriving. Though selling some of your assets may lead to a short-term gain, it isn’t the most reliable solution for retaining money. When recovering financially after a divorce, keep in mind that this action should not be the only one you result to as it isn’t the most sustainable solution on its own.
Being able to manage your finances is something everyone should be able to do whether you are in a relationship or not. Especially when alone, it’s important to stay educated and informed on what your budget is and how your finances are doing. A general rule of thumb
to remember is the 50/30/20 rule. This suggests that 50% of your income should go towards your needs/ expenses, 30% towards your wants, and the remaining 20% towards your savings. When dealing with financial change due to a divorce, it’s a good idea, for the time
being, to save as much as possible.

Citations

How to financially recover after a divorce. (2023, June 22). Canada Life.

https://www.canadalife.com/blog/financiallypreparedivorceseparation/howtofinanciallyrecoverafterdivorce.html

Janes, D. (2023, June 12). 10 MustKnow Tips to Financially Recover after Divorce.
Www.youtube.com.
https://www.youtube.com/watch?v=pvtFxxK_aGA
Leanne Townsend Lawyer and Divorce Coach
Leanne Townsend is a multifaceted entrepreneur and attorney experienced in the areas of family law and domestic violence. She provides a full range of family law legal services in addition to running workshops and other programs to support people as they go through divorce.

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