Moving On: Determining Priorities After A Divorce
One of the biggest hurdles newly divorced people find themselves struggling with is adapting to new, wildly unfamiliar living arrangements. Emotionally and financially, such a radical change in lifestyle can be difficult to assimilate to and can quickly become harmful if the issues are not promptly addressed. The first step is often taking stock of one's situation as it stands right then and there. Based on present circumstances, what kind of life does a person want to lead? The answer can vary dramatically based on age, finances, physical health, parental status and other factors. A comprehensive lifestyle analysis may be in order to gauge the viability of want versus need in terms of post divorce living.
How much income will you need to support the life change you want? After a settlement, many people find their lifestyle often has to change purely for financial reasons. Less discretionary income may mean moving from luxury living to more modest accommodations, particularly if children are involved and custodial settlements are less than ideal.
If you're an older person and perhaps have been out of the workforce for a while, will you be competitive in the current job market? Are your skills up to date? Is training or retraining needed? If so how long will it take to complete, and how much are you likely to earn once done? All these things will determine your monthly and annual budgets, and how you choose to approach your investments strategies and health insurance decisions.
Does the divorce have any effect on your retirement plans? Will you need to dip into your savings to keep yourself and your children, afloat according to your desired lifestyle? Do you make charitable donations? Are there other expenses to be considered, like pets or hobbies? Do you like to travel, and how often do you get away?
You should consider all assets, liquid and potential as well as expenses both current and projected. Factor in your next home, tuition for the kids, healthcare, and transportation, Social Security benefits, inheritances, individual retirement accounts, taxes and inflation. Strategic planning based on a realistic and thorough assessment of one's situation is crucial. You may opt to live more frugally now, in favor of more comfortable golden years. Conversely, you might choose to enjoy your newfound freedom and independence now, and live more modestly later. These are decisions that will affect you and your children for years to come, so careful deliberation is absolutely essential to determine when and where you focus your efforts. Working with a professional financial advisor can help you refine your strategy, make necessary adjustments, and enjoy financial stability both now and in the long run.
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