Divorce and Your Money Life – Forbes

Life as a couple is full of “we,” “our” and “us.” What do we want in our lives? What will we do in retirement? What do we need to plan for? Life planning was about your dreams and your partner’s dreams melded into a harmonious combination of “our”.

Divorce changes all of that.

You have to start reorienting from we to me.

It becomes a time to examine and rebuild your life—and your money—as a single person. The goal? To provide a life that has meaning, joy and financial stability.

In Financial Life Planning, we look at your life and your money as a unified, melded values-based plan of action. For example, think about the major aspects of your life beyond finances—health, leisure, work, community, home, family, learning, inner growth. They are all connected—which means you must consider them all. In order to live the life you imagine, start by defining your values and your dreams in each area. And then ask yourself—what needs attention, shifting or support?

Of course, mapping out your new, exciting and meaningful life needs to be incorporated with your financial reality. Are you struggling out of debt or newly free from an overspending spouse who heaped financial misery on top of everything else? Beginning anew is a step-by-step process: an alignment of your shift in reality to rebuilding financial stability.

You’ll want to examine your complete financial life as a single, including things like risk management, investments, cash flow, taxes, retirement and estate planning. In most couples, there is one person who is dominant in handling the finances. If you were not that person, financial education is probably your first step.

If your education and comfort around money is lacking, don’t worry, it’s not like it’s quantum physics. Getting comfortable is all about getting a handle on your money and there are plenty of resources around to help. Don’t be embarrassed if your financial knowledge isn’t what you believe it should be. It is the one area where many people feel profound regrets if they lack know-how. But honestly, you have permission to climb down off your own back. Financial knowledge is not God-given, nor is it genetic. Like everything else, it takes time and desire.

As a single person, risk management is of particular importance. Unless you have dependents, life insurance might be less important, but disability insurance becomes more important. Your emergency fund probably needs to be larger, as there is no second income to fill the gap. Cash flow planning could be incredibly smoother or more challenging depending on your income and your spending habits (and the spending habits of your ex). Receiving or paying alimony or support makes cash flow management critical. If you have trouble creating a workable cash flow management system, it’s time to find a planner that can help guide you.

Rethinking your estate planning as a single person is vital. Surely you don’t want your ex making medical decisions for you or receiving a windfall upon your death. So be sure to change your Will, Power of Attorney and Health Care Directive as soon as possible, along with beneficiary designations on life insurance and retirement plans.

We have a deep emotional connection around money. It brings us comfort or provides stress. We learned about money pretty much the same way we learned about relationships—by watching our parents from a very young age. For better or worse, they shaped our beliefs around money and relationships.

Think about your beliefs about money for a moment. Is money a tool or is it a source of conflict? Do your beliefs support your success or is some modification in order? Now could be the perfect time to examine your belief system. And then dive into making any changes that will move you toward the life you want most.

Life as a new single is about possibility. It requires resilience and the ability to shift your thinking (and doing) from where you are now to where you want to go. Very little good comes from looking back, except perhaps to learn necessary lessons. Personal evolution can be a joyful act of emergence and growth. Just make sure your money life supports your dreams.

Source: Divorce Money

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