5 Financial Considerations to Keep in Mind When Planning for Divorce

Taking the time to decide what changes will need to be made because of the realities of the divorce is an important step in the divorce process. Many people enter into divorce without taking into consideration the changes that are going to need to be made after the divorce and without having a realistic idea of how much divorce costs. This blog post is going to address 5 financial issues that that should be considered when planning for your divorce.

  1. Where are you going to get your insurance from? One of the largest costs in most people’s budgets is the cost of insurance and healthcare. While people are married the cost of insurance may be coming from one employer and if you are planning on divorcing it is important to factor in how you will be covered for insurance after the divorce.
  2. How much is the divorce going to cost? Consulting with an attorney when contemplating divorce can be helpful in gauging how much money is going to be spent on the actual divorce and how that is going to impact your bottom-line for your divorce year. Costs of attorney’s fees can add up quickly in a divorce and it is important to factor them into your planning for your divorce. Attorneys can explain how much money will be spent on getting the divorce process started and the possible ways that the costs of divorce can be covered and how they may be changed throughout the process.
  3. How will your retirement planning need to change? During a marriage, many people plan for retirement together and whether that is a plan to use a single retirement account or through another means of saving for retirement, a divorce can often change the reality of what retirement is going to look like. This may mean that you need to look at new ways to save for retirement and set up a new long-term plan that matches the new reality of having less retirement savings than you had originally anticipated. The way that different types of retirement accounts are split up in a divorce is often complicated and based on tables that can be difficult to understand. An attorney can be helpful in explaining what the value of a retirement account is and what your interest in the account is.
  4. How will childcare be provided after the divorce? In many families going through divorce, one party had not previously been working and had been providing childcare or the parties had worked out a schedule where minimal or no childcare was necessary for the children. Many people need to change their work schedules after a divorce and that can cause the cost of childcare to become a large strain on a budget. The average annual childcare cost in Texas can range from around three-thousand dollars for a school-aged child to around ten-thousand dollars for an infant.  Anticipating this change is an important part of planning for your budget after a divorce.
  5. How will you need to change your work schedule after the divorce? Whether you will need to take more time off of work after a divorce in order to care for your children more or you will need to find a job because you had previously been relying on your spouse’s income, it is important to re-assess your career plans and how you will make your new circumstances work with your budget.