Category: Financial Impact of Divorce

Home Business Post-Divorce: Making Moves

Many people struggle with going back to work after their divorce. For some, they’d rather try and do things their way with a home business post-divorce. While it can be tricky, it can also open up a new, and potentially lucrative, chapter in your life…

Home Business Post-Divorce: How To Prep

Find your niche

When starting a home business post-divorce, you first need to find your niche. The appeal of a home-based business is that it lets you appeal to markets which other major brands may look over. Where they may not see a profit, you could potentially have many loyal customers who are willing to pay for what you have to offer.

However, you need to make sure it’s something which you can properly apply your skills to. You don’t want to invest all your money into something you have no prior knowledge about! Take things slowly, do your research, and find an area you think you can tap into. That way, you avoid potentially getting stuck in an over-saturated or nonexistent market.

Take your time

It’s important to not rush into creating your home business post-divorce. Trying to simply rush and get things going will more than likely set your venture up for failure. It may take some time and require you to do some traditional work in the meantime as you save funds and get things off the ground.

The two major things you want to have are a good workspace at home and enough funds to get up and running. A good home workspace will encourage you to view your work as serious, even when at the house. Additionally, having plenty of funds will ensure you can cover your costs, especially in the early months when you’re trying to get sales going.

Don’t forget to take breaks

It can be exciting and stressful to set up a home business post-divorce. Still, you have to remember to not push yourself too hard. After all, you’re still recovering from all the stress and changes that came with your divorce.

That’s why you’ll want to make sure you take time to relax. Your mental and physically health should always take priority. It’s okay if it takes longer than expected to get your business running. Starting later but much more prepared is better than rushing and only scraping by!

Prenups and Postnups: What’s the Difference?

If you are engaged and discussing financials, you might be wondering what the difference is between prenuptial and postnuptial agreements. Prenups and postnups both determine how a couple will divide their assets in the event of a divorce. The biggest difference is that prenups occur before marriage and postnups occur after a couple is married. A couple usually considers these types of agreements if one person is bringing a lot more wealth to the relationship and wants to protect those assets. Or if one is expecting to inherit large sums of money. Although both have their critics, many find that these types of agreements are the best way to protect your financial wealth.

Prenups and Postnups: What’s the Difference and Do You Need One?

What is a Prenup?

Prenups and postnups are very similar in concept, they just occur at different times. A prenuptial is an agreement between two prospective spouses that determines how their assets will be divided if they divorce. A lot of people feel that a prenup is anti-romantic. They think that it means a couple is already assuming they’ll divorce before they even get married. However, in the US, 50% of marriages end in divorce. Realistically, prenups are a wise choice to protect your financial security.

Who Needs a Prenup?

A couple might discuss prenups and postnups if one partner is bringing more money into the marriage than the other. Similarly, if one has a large estate or is going to inherit a lot of money, they may want one. A prenup prevents a couple from going through a long, drawn-out divorce if they decide to end their marriage. Prenups are especially common for people entering their second, third, or fourth marriages.

What is a Postnup?

Prenups and postnups are very similar, however, a postnup occurs after a couple marries. Other than timing, it’s basically the same as a prenuptial agreement. These have become more common in recent years. They are now legal in all 50 states. Like a prenup, a postnup decides how your assets will be divided in the case of your marriage ending. Similar to prenups, they don’t make any concessions regarding your children or future children.

Who Needs a Postnup?

Since prenups and postnups are so similar, you might be wondering why some opt for postnups. The main reason is simple convenience. Often, the planning stage of an engagement is so stressful and busy that a couple simply doesn’t have time to sit down and draw up a prenup. If this is the case, they’ll often decide to do a postnup instead. This is also an option for couples who feel that the conversation will be awkward and would rather wait until after they marry to have it. Like a prenup, postnups are encouraged if partners are bringing significantly different amounts of wealth into a marriage.

The bottom line is that prenups and postnups are very similar. The only difference between them is that prenuptial take place before marriage and postnuptials occur after the couple says “I do.” However, both of them are legal agreements that spell out what will happen to financial assets in the case of a divorce. If you decide that you and your partner should come to an agreement on either a prenup or postnup, you should consult an experienced attorney. They’ll help guide you through the process and make sure that you are protected financially in the case of your marriage dissolving. Hopefully, you’ll never need to go through the stress of a divorce, but if you do, having a prenup or postnup will make the process much easier.

How-to Find a Post-Divorce Apartment

Following your divorce, you may need to start getting ready to move. Finding a new home can be both difficult and expensive. As a result, many people opt for a post-divorce apartment instead. If you’re in the market for an apartment, there’s a few things to consider while you’re searching…

How-to Find a Post-Divorce Apartment: Key Factors

Budget accordingly

One of the most important things to remember when looking for a post-divorce apartment is your budget. Your divorce may have left a bit of an impact on your finances. You may also need to completely redo your past budget. Therefore, you need to make sure your new apartment won’t break the bank.

Remember that there’s more to your apartment’s expenses than just rent. You’ll also have to consider costs like groceries and utilities as well. When you’re looking at an apartment, be sure to ask what is or isn’t included, and what other extra costs they may have.

Proximity to others

You should also consider how close your apartment is to others important to you. After your divorce, your friends and family are going to still be an important source of divorce. That’s why it may be good to find a place close-by to them. This makes it easy for them to come over and for you to spend time with them.

If you’re a parent, then you’ll especially want to give some consideration to your kids. It may be important to find a place which isn’t too far from your other co-parent to make things easier. You may also want to think about if your apartment will have enough space for your kids should they stay over there.

Future goals

Something you don’t want to forget to consider when looking for a post-divorce apartment is what your future plans are. For instance, consider what kind of job you want to work down the line. Will your apartment be close by to those opportunities? If not, then you may want to view this as just a temporary steppingstone.

Of course, you should also think about if you want to buy a new home. Some people like to stay in their apartment for a few years before settling down in a house again. Still, if you want to move into a new home sooner than that, you probably won’t want a super-long lease.

Post-Divorce Debt: Management Methods

Divorce can sometimes be costly, and as such it helps to prepare a bit financially. Still, even with a good plan, you might find yourself with some post-divorce debt. This debt is definitely something you’ll want to get under control. There’s a few things you can do to help get it down to a manageable level…

Post-Divorce Debt: Financial Impact of Divorce

Re-evaluate your budget

Your post-divorce debt is probably going to require you to take a new look at your budget. As you go away from a double-income household to a single-income one, your past budget may not work as well as it used to. Plus, you’ll probably have some additional expenses to manage. Among these will be your debt.

Therefore, take the time and plan out a potential new budget. Consider your necessary expenses, and how much income you make. This can help you see if you can cut spending in one area to help with debt payments, or if you may need to consider looking for a better-paying job.

Set up payment plans

Another helpful way to handle post-divorce debt is by having payment plans. Not paying your debt at all can quickly add up as extra interest is accumulated. Now, some places may give forgiveness for one or two months missed. Still, if it becomes a habit, then your debt will continue to mount and things like your credit will suffer.

Instead, you can see about setting up a payment plan. Usually, these will let you set up automatic payments for debt payments every month. You may also be able to set up adjusted payments. This can see you making smaller, more manageable monthly payments, but making more of them over a longer period of time.

Consider all your strategies

Of course, the best thing to do with post-divorce debt is to pay it off. However, it’s entirely possible that you just don’t have the extra money to do so. Rather than just let those bills pile up, you should take the time to consider all of your potential options.

For example, if you have good credit, you may want to think about debt consolidation. This puts all your debt together and can lower your interest rate. You might also want to consider debt management, settlement, and in extreme cases, bankruptcy. Just note that these can have a negative impact on your credit in exchange for helping you control or remove your debt.

Sell or Keep the Family Home: Post-Divorce

After a divorce, it can be difficult to decide if you should sell or keep the family home. There are plenty of factors that play into this. Everyone’s situation will be different…

Sell or Keep the Family Home: Factors to Consider

Finances

Your financial situation will play a big role in deciding if you should sell or keep the family home after a divorce. Based on your situation, you may have the option to sell the home and split the profit. Another option may be to buy out your spouse to keep the house. You will need to determine which is a better option for you financially.

You may have to speak with a financial advisor or an accountant to see which option is going to be the best financially. Keep in mind there are a lot of financial responsibilities that come with owning a house. You don’t want to start a new chapter of your life with expenses and debt you can’t handle. 

Eligibility for a Mortgage 

Additionally, while deciding if you should sell or keep the family home, you should check to see if you could qualify for a mortgage, if needed. In some cases, one spouse may not be approved to carry a mortgage on their own. This is especially true if they were a non-income earning spouse. You certainly don’t want to make a decision based on thinking you could easily buy another house without making sure you are eligible for a mortgage.

Children

If you have children, especially ones in school, they could be a factor in deciding if you should sell or keep the family home. It can be difficult to uproot children and move them to a different school. Therefore, this may play a role in you deciding to keep you in your current home. Research the schools in the new area you may be considering so that you can make an informed decision. 

A New Start

Sometimes, you may just need a brand new start. A home can hold a lot of memories and emotions. Selling a home can give you the opportunity for a new start. Whether that move is locally, or long-distance, moving into a completely new home may be a deciding factor in whether or not to sell or keep the family home. 

Divorce comes with many difficult decisions to make. Deciding if you should keep or sell the family home could be one of them. Take your time, do your research, and think it through so that you make sure you’re making the right decision.

Building Your Credit After a Divorce

Building your credit after a divorce is extremely important. Your credit score affects what kind of apartment or home you can afford as well as what vehicle you can purchase and much more. If you have a low or no credit score, it will be difficult to even find a place to live after you are separated. So building up your credit during or right after your divorce is key. Open up your accounts and begin putting all of your sole money in there. Pay all of your bills on time every month, and pay off credit cards as well. Work with your ex if there is any joint debt. And finally, set a tight monthly budget and stick to it as closely as possible. Divorce can negatively impact your credit score, so it’s important to know how to build credit back afterward.

Building Your Credit After a Divorce: Recovering Financially

Open Your Own Accounts

Building your credit after divorce begins with you opening up your bank accounts in your name only. You likely already have some joint accounts with your ex, but now is the time to open some that are only in your name. You’ll want to open a savings and checking account. Move all of the money that is yours alone into these accounts. It’s also a good time to go ahead and close any joint accounts. You don’t want your ex running up large debts with your name still attached to the accounts.

Pay Bills on Time

It’s important to pay all of your bills on time when building your credit after a divorce. This also includes new payments like alimony and child support. If you are late on your bills each month, it can negatively impact your credit score. It’s also a good idea to pay off your credit cards in full each month.

Work With Your Ex

While building your credit after a divorce, you might have to deal with some joint debt with your ex. It may be the last thing you want to do to contact your ex, but if you can work together to pay off joint debt quickly, it will help your credit. There are many ways to work on paying off debt, for example, the debt snowball. This is where you pay off your smallest debts first, then use the money that you save from those debts to pay off larger ones. Eventually, you are debt-free.

Set a Monthly Budget

Finally, when building your credit after a divorce, it’s extremely important to set a monthly budget. It’s best to set a very tight budget and live as modestly as possible for a little while. This will ensure that you have plenty of money to pay off any debts and pay off credit card bills every month. If you have plenty of money in savings, an unexpected expense isn’t the emergency it might be if you weren’t budgeting well.

Building your credit after a divorce can take a while, so it’s important to start as soon as possible. Some people think it’s wise to go ahead and open up a credit card or bank account before they even begin the divorce process so that they can start establishing credit on their own. Always pay your bills on time each month, including any new payments like alimony or child support. Work with your ex to try and pay off joint debts as quickly as possible to help both of your credit scores. And finally, budget budget budget. Living frugally will allow you to put away some savings so that unexpected expenses don’t end up hurting your credit score by going to collections. Helpfully, you’ll be able to bounce back financially from divorce and build up your credit quickly.

Talking About Money with Your Spouse

Talking about money can be an awkward conversation for many people. Many are brought up not to discuss finances with anybody, even their spouse. However, finances are one of the main sources of stress in a marriage. You and your spouse must be able to have healthy discussions about money. It’s not a good idea to have one spouse handle all the finances in a relationship. It should be a group effort between the two of you so that you both have a say in things. Choose the right moments to talk about money, plan them. And continue to have them throughout your marriage. Money will always be a part of your life, so keep the conversation going. And make sure that both you and your spouse can be honest with each other about mistakes. Having a healthy relationship with finances will strengthen your marriage.

Talking About Money with Your Spouse: Having the Awkward Conversation

Do I have to?

Talking about money with your spouse is very important and a necessary part of any marriage. Finances are one of the main sources of stress in relationships and are often cited as a reason for divorce. Both spouses must have a say in their spending habits. It’s also important that both spouses are aware of your overall financial health in the relationship. Many times, people are blind-sided about the state of their finances if they haven’t been having conversations throughout their marriage about money. Being unaware of your financial situation and trusting your partner with money can leave you vulnerable and ill-prepared if something changes in your marriage.

Choose the Right Moment

Talking about money should be an ongoing discussion in your marriage. However, it’s important to pick the right time to talk about money. It’s a great idea to schedule a time to talk about money together. For example, plan a meal one night where you’ll check in with each other and discuss financial goals. Make sure to have financial conversations when you’re both calm. For instance, it’s not a great idea to bring up money when you’re in the middle of a fight.

Make it an Ongoing Discussion

While you should be careful about picking the right time for talking about money, it should be an ongoing discussion in your marriage. Money is something that will always be a part of your life, and it’s easy to get into troublesome spending habits. One way to prevent this is to make sure that you are frequently checking in with one another. Your relationship will change, and your financial goals likely will as well.

Be Honest About Mistakes

Finally, when talking about money with your spouse, it’s important, to be honest with one another. Hiding debt or financial troubles can lead you down a dangerous path in marriage. You both will likely go off-track with spending once in a while and that’s perfectly normal. However, it’s important to be honest so that you and your partner can work together to get back on track.

Talking about money can be a tricky situation for a lot of people. However, it’s incredibly important in a marriage because finances play such an important role in your overall life. Both partners should be very aware of the financial health of the relationship, and you should work together to create financial goals. Make time in your schedule to discuss your money, and make sure that you keep the discussion going throughout your marriage. Finally, be open and honest about any financial concerns or mistakes. You and your partner need to be on the same page with spending. Having a healthy relationship with finances can increase the strength of your marriage and smooth out a lot of marital stress. Whether you have plenty of money or are struggling financially, it’s important to handle it as a team.

How-to: Choose a Divorce Lawyer

If you want to learn more about how to choose a divorce lawyer, you can learn more from this video.

When you start the divorce process, you will have a lot of things on your plate. From where you are going to live, to figuring out your finances and how this will affect your kids. One of the things you will also need to start working on is looking for legal help. It can be difficult to know who to turn to when you are faced with divorce. Not many people have had experience with this process before, so it can be difficult to know what to do. In a divorce, there is a lot on the line. Learn how to choose a divorce lawyer that is right for you and your situation.

How-to: Choose a Divorce Lawyer: Weighing Your Options

Rethink What You Want

Initially, you may think you want a really aggressive lawyer that is going to start fights and make your ex’s life miserable. Take a step back and evaluate if this is how you really want to proceed. While you do want someone to fight for you, you do not want someone who is going to create mayhem and absolute chaos. This will make everything harder for you in the long run. Having a fair and healthy divorce will be much easier for everyone. This may make you rethink what you want when you choose a divorce lawyer.

Ultimately, the goal of this process is to get divorced. Not only that, but you want to do that without much impact on your life. Do not let your emotions go crazy when it comes down to negotiating over material things that don’t mean much to you in the long run. If you do this, your divorce will become more expensive and longer than you had planned for it to be. Is it worth it? No, it won’t be. Focus on getting divorced as quickly and with as little financial damage, as possible. With this, be realistic about your attorney and what you expect from them. You do not want them to double as your therapist. That is not their job, and this will cost you much more than speaking to an actual therapist.

Looking for a Lawyer

You may feel overwhelmed when you try to choose a divorce lawyer. There are so many options. However, don’t jump to hire the first lawyer you meet. Not all lawyers are equal. Interview at least 3 different divorce attorneys before you decide. One thing to consider is that you should look for a lawyer that specializes in family law. You want a lawyer who is knowledgeable and experienced. Other good traits are good communication and negotiation skills.

You can also ask friends and family for recommendations. Recommendations can go a long way. Get their input on lawyers they had both good and bad experiences with. Also, look at the attorney’s trial record and success in court. This will give you an idea as to how good they are at negotiating. This will help give you an idea about which lawyer to choose to help you through your divorce.

Who Needs a Will? When do I Need a Will?

Knowing who needs a will and when you should create a will is an important step in preparing for you future. A will is a legal document that spells out what will happen to your assets if you die. It also lays out who will be in charge of managing your assets. If you are married, you should create a will. If you have any children, you’ll want to create a will for their benefit. And anybody with positive assets should have a will in place. Having an experienced attorney guide you through the process of creating a will should give you peace of mind about your loved ones after you pass.

Who Needs a Will? When do I Need a Will?

Married

If you are married, then you’re someone who needs a will. When you die without a will, your assets would likely pass to your spouse, but it’s not a guarantee. Therefore, a will can ensure that your spouse receives your assets if that is what you wish. If there is anybody else that you want to give some assets to, this would be included in your will.

Children

Parents definitely fall into the category of people who need a will in place. In general, children inherit after your spouse has also died. So if you’d rather they inherit assets differently, you’ll need to spell that out. You can choose how to divide assets and property among your children however you’d like. In addition, a will lays out who the executor of your estate will be. It will also designate guardians for your children. This is obviously a huge part of why you need a will. The guardian will be in charge of raising your children after your passing. You’ll need to update your will if you have more children, or if anything changes with your guardianship plans.

Positive Assets

Finally, the question of who needs a will also depends on your assets and debt. If you have positive assets, you’ll want to create a will. Having positive assets means that your assets are greater than your debts. Therefore, if you’ve made and saved a lot of money and it exceeds any debts then you’ll want to designate what happens to it. Similarly, if you’ve inherited large sums of money or property, you’ll need to spell out what should be done in the event of your death.

If you’ve been wondering who needs a will, the answer really depends on whether or not it’s important to you to designate what happens to your assets or property after you die. For example, if you’re married and want to make absolutely sure your spouse inherits, or want to prevent that for any reason. If you have children, a will is important so that you can designate how they inherit assets and property from you. It also will spell out who should care for them after you die. And finally, if you’ve managed to save a bigger sum of money than your debts, you’ll want to designate who it goes to. By creating a will, you’ll be able to take care of loved ones even after you pass away.

Post-Divorce Credit Score: Build Yours

Divorce can not only be an emotionally tough time, but a financially tough one as well. As such, it’s important you get your finances back on track. A big part of that will be building up your post-divorce credit score. With how important credit scores are, it’s key that you do so properly…

Post-Divorce Credit Score: Prepare For The Future

Check your current score

Of course, before you can improve your post-divorce credit score, you’ll need to know what it is. This is best done by ordering a credit report. You can do this via one of the three major credit bureaus. With this report, you’ll be able to see both individual and joint debts that you have.

Individual debts are ones which are solely tied to you. However, joint debts are ones are ones where both you and your spouse are responsible. If either one of you fails to make a payment, then you both will be negatively affected.  Therefore, keep track of these accounts, and they’ll be important for your next step.

Reorganize your accounts

Now that you know what your debts are, it’s good to reorganize your accounts. First, you may want to consider opening new individual ones. By starting now, you can help your post-divorce credit score in the long run. Still, if that isn’t something you want to do, then paying down any existing ones will also help.

Next, take steps to close any old joint accounts you have. Get in touch with your lenders and ask them to transfer these accounts to individual ones based on your divorce agreement and have them closed. You should also remove you and your ex’s name from any accounts which have you as authorized users. Taking these steps will help make this debt more manageable for the both of you.

Pay your bills

In the commotion of divorce, it’s easy for bill payments to fall by the wayside. However, missing these payments can be pretty bad for your post-divorce credit score. Therefore, you want to make sure you pay them on time as best as you can.

A good way to do this is by setting up automatic payments. That way, you won’t have to worry about accidentally forgetting to make a payment. Slowly but surely, your score will rise as you continue to make on-time payments.