The day you’ve anxiously been waiting for is here. You open the mailbox and the papers you have been expecting are waiting for you. You pick up the envelope and acknowledge the sender. For a moment time stands still and you may look at the sky, hear the birds chirping, take a deep breath or even shed a tear; but inevitably, this as a defining moment, it is the beginning of the rest of your life.
Going through a divorce is one of the most emotional and financially straining experiences. It is polarizing and destructive to the plans that you jointly created with your spouse. No matter what, it is not easy, not even in its finality. In its best moments, marriage is about love and merging two lives together. Conversely, divorce is about unraveling and negotiating financial security for oneself. Bottom line, it’s about money.
In all things, there is a silver lining. In divorce, it is regaining control and becoming solely responsible for securing your own financial future. It’s the process of new beginnings, of reclaiming oneself and cultivating new dreams or just dusting off old ones that may have been sidelined during your marriage. So, you are divorced, now let’s make sure you are empowered.
Proactive approach – Today is the day! Let’s focus on the things within your power to control in addition to reserving the time needed to grieve the loss and deal with the emotional fallout you will experience.
Set goals – This is a great opportunity to set clear and defined personal and financial goals. Goals that define what is important to you and what you want to accomplish going forward. It is necessary to set both short- and long-term goals. Short-term goals (1 month – 2 years) are critical to managing day-to-day immediately following the divorce. Clients often find that giving themselves roughly 3-5 years to get fully back on track is less overwhelming and stressful.
Make a plan – If you haven’t already been working with your financial professional during your divorce process, NOW is the time to start. As a Financial Advisor, I work with clients to illustrate their unique situation in our planning tool, assist in defining goals and implement a path to achieving objectives. A proper plan takes the guesswork out of “where do I start and how do I get there”. It is the critical roadmap for financial security.
- Review your financials – After divorce, it’s important to reassess everything. Appropriately managing finances will likely mean spending less now that there will be two households and separate expenses. Do not be afraid to downsize. The stress of being overleveraged is not worth it to simply keep the same lifestyle you grew accustomed to in marriage.
- Create a budget – Divorce is an opportunity to hit reset. Evaluate your spending habits and redefine your needs vs. wants. Make sure you are living within your means, paying down debt and setting aside funds for retirement. That’s where Henry+Horne can help!
- Evaluate your assets & insurance coverage – Accounts you held in marriage may not be the same types of accounts you should hold in divorce. For example, close all jointly held accounts and reestablish as individual accounts. Beneficiary designations will need to be updated and a review of insurance policies often reveals any gaps in protection or opportunities for additional cost savings.
- Align portfolios – In divorce, couples equalize settlements through a variety of asset transfers. Our planning process provides us with the insight to appropriately size your portfolio and reallocate to investments according to your risk profile and income needs.
- Protect you and your family – Creating or updating your Estate Plan is necessary to make sure all trustees, beneficiaries, wills and powers of attorney are up to date and reviewed periodically especially once divorced.
Ultimately, as you acknowledge receipt of those long-awaited divorce papers, your reality may be spinning before you. The great news is this is a defining moment, but it does not define you. Take this moment to invest in your financial future, give us a call, we’ve got your back.
Henry+Horne Wealth Management has the expertise to help individuals better navigate the financial issues faced during the divorce process. Our Certified Divorce Financial Analyst coaches’ clients through the unknown. Together, we work to clarify your pre/post-divorce financial picture and help you to understand how settlement decisions made today set your path forward.
Shaunna M. Anderson, CDFA® is Senior Vice President and Principal of Henry+Horne Wealth Management and can be reached at 480-483-3489 or ShaunnaA@hh-wm.com
Advisory services offered through Wealth Management, LLC, DBA Henry+Horne Wealth Management (“HHWM”), a registered investment advisor. Securities offered through M.S. Howells & Co. (“MSH”), a registered broker-dealer. Member FINRA/SIPC. Henry+Horne, MSH, and HHWM are separate entities.