Divorce can be an emotionally devastating stage in the life of a couple and a family. It's not just emotional, but also has an additional component: financial obligations, which can be a significant burden for women. It would be helpful to find trusted family law attorneys to help you through the process, or the divorce could end up being very costly.
It sounds intense, but it's true: Divorce can be incredibly detrimental to a woman's financial health, even for those with assets, as they tend to suffer financially during and after a separation. According to the study "Revealing the Untold Truth: The Financial Challenges Women Face During and After Divorce," conducted by Stacy Francis, a New York-based divorce financial analyst.
The study analyzed 150 women in different stages of the divorce process and found that many of them are forced to make important life decisions in a short period of time, leading them to rush into decisions and frequently make mistakes.
Francis makes a series of recommendations to prepare your finances if you are facing a divorce:
Keep track of what you have and what you owe
It may seem tedious, but it's necessary to clearly calculate your assets and liabilities. If you've relinquished financial control during your marriage, it may be a disadvantage for your spouse, but it can be equalized.
It's essential to have recent bank, pension, and social security account statements, property deeds, mortgage, car loan, and credit card statements, as well as personal loans, and to be familiar with tax returns for at least the last five years if you own a business.
Look at your expenses with a magnifying glass
It's essential to try to understand how much your current life costs you. How many of those expenses are fixed, whether they're yours, your spouse's, or your children's. It's crucial to review how those expenses are paid, as you may not be able to do so for a while, which will mean paying more taxes, says Lili Vasileff, author of Money and Divorce.
You have to think long term
One of the most important things to do, even before speaking with your family law attorney, is to think about the outcome you want from the divorce process. It's essential to visualize your life in 5 or 10 years and whether your current lifestyle is your priority or whether you're more comfortable continuing as you are. These decisions will be beneficial during the negotiation.
A common mistake divorced women in Francis's study make is that they insist on buying a home they can't afford, as selling it might reduce their earnings. Mistakes are sometimes made in the couple's investment accounts, as the values may be different after taxes.
During the process, 15% of the women in the study said they wanted to go through a divorce process with a separate agreement.
It's understandable that many women are concerned about the magnitude of the financial loss that a divorce will entail, since supporting two people requires the same income as maintaining a household.
Suppose legal fees, uncertainty about how assets will be divided, and alimony and child support are added to this challenging reality. In that case, it's no wonder some women decide to simply endure their situation.
Request financial advice
Not only will you need to ensure that all assets are transferred accurately, but you'll also need to design a new financial life for yourself and, if applicable, your children.
You'll need to prepare a new budget to establish your savings goals and how you'll reinvest the money you receive as part of the divorce settlement. You'll then need to consult with a financial planner.
The good news
Despite all the grieving, there is good news. Stacy Francis's study found that 59% of women were more satisfied with their financial situation when they were unmarried, 37% after divorce, and 22% when they were completely single.
In the document, Francis says there's an explanation for all this: "It was at that time when women had more control. Now that they're alone, it's up to them," says the financial analyst.
