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Gettings Reed Financial Services, LLC

(formally Todd Financial Services)




672 Main Street
Suite 300
Lafayette, IN 47901-1335

Life after divorce

| November 20, 2014
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Adjusting to Life Financially

after a Divorce


There's no doubt about it--going through a divorce

can be an emotionally trying time. Ironing out a

divorce settlement, attending various court hearings,

and dealing with competing attorneys can all weigh

heavily on the parties involved.

In addition to the emotional impact a divorce can

have, it's important to be aware of how your financial

position will be impacted. Now, more than ever, you

need to make sure that your finances are on the right

track. You will then be able to put the past behind you

and set in place the building blocks that can be the

foundation for your new financial future.

Assess your current financial


Following a divorce, you'll need to get a handle on

your finances and assess your current financial

situation, taking into account the likely loss of your

former spouse's income. In addition, you may now be

responsible for paying for expenses that you were

once able to share with your former spouse, such as

housing, utilities, and car loans. Ultimately, you may

come to the realization that you're no longer able to

live the lifestyle you were accustomed to before your


Establish a budget

A good place to start is to establish a budget that

reflects your current monthly income and expenses.

In addition to your regular salary and wages, be sure

to include other types of income, such as dividends

and interest. If you will be receiving alimony and/or

child support, you'll want to include those payments

as well.

As for expenses, you'll want to focus on dividing them

into two categories: fixed and discretionary. Fixed

expenses include things like housing, food, and

transportation. Discretionary expenses include things

like entertainment, vacations, etc. Keep in mind that

you may need to cut back on some of your

discretionary expenses until you adjust to living on

less income. However, it's important not to deprive

yourself entirely of any enjoyment. You'll want to build

the occasional reward (for example, yoga class,

dinner with friends) into your budget.

Reevaluate/reprioritize your financial


Your next step should be to reevaluate your financial

goals. While you were married, you may have set

certain financial goals with your spouse. Now that you

are on your own, these goals may have changed.

Start out by making a list of the things that you now

would like to achieve. Do you need to put more

money towards retirement? Are you interested in

going back to school? Would you like to save for a

new home?

You'll want to be sure to reprioritize your financial

goals as well. You and your spouse may have

planned on buying a vacation home at the beach.

After your divorce, however, you may find that other

goals may become more important (for example,

making sure your cash reserve is adequately funded).

Take control of your debt

While you're adjusting to your new budget, be sure

that you take control of your debt and credit. You

should try to avoid the temptation to rely on credit

cards to provide extras. And if you do have debt, try

to put a plan in place to pay it off as quickly as

possible. The following are some tips to help you pay

off your debt:

• Keep track of balances and interest rates

• Develop a plan to manage payments and avoid

late fees

• Pay off high-interest debt first

• Take advantage of debt consolidation/refinancing


Protect/establish credit

Since divorce can have a negative impact on your

credit rating, consider taking steps to try to protect

your credit record and/or establish credit in your own

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