After separating from her husband last year, Marilyn has been struggling to pay her bills on time and to keep track of her expenses. During the 21 years she was married, her accountant husband had taken care of all their financial transactions. “I didn’t understand the basics of managing our money,” Marilyn reveals, “I had never even read our bank statement.”

Four years ago, 46-year-old businessman Steven decided to let his ex-wife keep the family home, since she would have custody of their two young children. “I left everything with her and walked out with just my personal possessions.” Today he wonders if he made the right decision as he is finding it difficult to afford to buy another house of his own.

The dissolution of a marriage usually brings upheaval for the former partners, their family members and friends. While attention is given to the emotional and mental effects of divorce, the monetary challenges cannot be ignored as they can leave the family finances in serious disarray.

If you are dealing with divorce, here are some important considerations:

Be Aware of Your Financial Picture

With the changing financial situation that a divorce can bring, you need to be on top of your money situation, knowing clearly if your income will meet your monthly spending requirements. Download a personal budget at www.financiallysmartonline.com to help you plan for regular expenses, control non-essential spending and project for possible emergency costs. This will also help you to know what amount your former spouse should be required to contribute to the household.

Need help with managing your money? CLICK HERE!

Prepare For Additional Costs

It’s definitely easier when two persons pool together to meet shared needs such as housing, food and utilities. Running separate households usually brings additional expenses that must be budgeted for. Depending on the separation agreement, you may now have to pay alimony, or be totally responsible for of all your personal expenses. If you have children, increased costs such as transportation between the parents’ homes, and additional child care should be factored in.

Learn New Money Skills

You may also be faced with new responsibilities that were previously carried out by your spouse. If balancing your cheque book, paying utility bills promptly, and shopping wisely at the supermarket are new tasks for you, make every effort to learn how to manage your money. Look out for books, magazines, Internet articles and television shows that can give you tips; and use a cash flow calculator available online to help keep you on track with your spending.

Get Advice On Assets and Liabilities

Another important consideration is how to deal with jointly held possessions. If your finances were commingled in bank accounts, businesses and belongings, it is crucial to get guidance from your own lawyer or accountant. Some people have lost significant sums because they allowed their former spouse to make the decisions on the separation of assets. It’s also necessary to get advice on loans or credit cards that you may have co-signed while married. Don’t assume that your ex has paid off debt based on verbal assurances; get written proof that these obligations have been met.

Change Financial Information

Along with making necessary changes to joint assets, remember that you may need to adjust legal documents such as your will and life insurance policies. Ensure that these now reflect your current wishes on how your property should be disposed of when you pass on. Think carefully if you also want to change the trustee designation for your children on your life insurance and bank accounts.

Make Plans For The Future

Unfortunately, the marriage promise of ‘until death us do part’ has been broken, and with it disappeared the idea that you and your spouse would support each other through your retirement years. It’s very important to get expert advice to ensure that your monetary needs will be met when you stop working. Go to a financial institution that can help you to plan how much money you will need to save and the best types of investments for your retirement goals.

Invest Your Settlement

If your divorce terms involved the liquidation of property or business, or you received a cash settlement, you need to invest your money wisely. This is not the time to go on a post-divorce spending spree to feel better about yourself. With advice from an investment advisor, use the money to boost your retirement savings, fund your children’s college tuition, or invest in assets such as real estate that can provide income and growth.

Avoid Money Hang-Ups

At this time, you also have to manage your emotions around money. It might be tempting to use money to exact revenge, by making unreasonable demands of your ex, or passing on unfavourable comments to your children. Even if you feel that you have not received what is due to you, or if you think you have been overextended, don’t let money issues make you bitter. Despite your disappointments, your divorce can signal a new beginning for you to take control of your own financial success.

Copyright © 2009 Cherryl Hanson Simpson. No reproduction without written consent.

Originally published in The Daily Observer, September 24, 2009

Cherryl is a financial consultant and coach, founder of Financially S.M.A.R.T. Services. See more of her work at www.financiallyfreenetwork.com and www.financiallysmartonline.com. Contact Cherryl