When parents divorce and one of them takes primary custody of the children, they often feel like single parents. Even if you are getting child support, your lifestyle will likely need to change, at least for a time. Paying to maintain a home on one income and filing taxes as a single person are two ways in which getting divorced can significantly impact a person's finances.
It's essential not to neglect your savings. It's important to continue (or begin) to save for retirement. Financial experts give divorced and other single parents some key pieces of advice to help them stay on track for retirement.
Create a Realistic Budget
Determine what your mandatory expenses are. These may be things that you never thought about because your spouse took care of them. This includes things like utilities, groceries and car maintenance. Then look at discretionary expenses and see where you can make cuts.
This may mean downsizing your lifestyle. Perhaps you had your heart set on keeping the family home. However, a home can be difficult, if not impossible, for one person to maintain. You may also need to cut back on things like the number of cable channels you get or how often you go to restaurants. If your kids are old enough, explain to them (without blaming their other parent) that you all have to live on a smaller budget than you did previously.
Don't Overcompensate for a Missing Parent with Gifts
Many custodial parents try to make up for the fact that their kids don't see as much of their mom or dad by splurging on clothes, toys, electronics and trips. First, this isn't any sort of long-term solution. Second, it can quickly lead to serious credit card debt.
Seek Financial Advice
Prioritizing expenses and making the most of your money is key. A financial planner can help determine what investments and savings products can earn you the highest return on your dollar and minimize your tax obligations. Financial experts can also help you determine how best to save for college as well as your own retirement. It may be unwise to send your child to an Ivy League school if it means not having enough money to live on in your senior years.
Don't wait until your divorce is final to start planning your financial future. This should be done during (or even before) divorce proceedings. That way, your attorney can help you seek a spousal and child support settlement that will allow you to provide for yourself and your children as comfortably as possible.
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