Weathering the storm that is divorce is only the beginning. Once the storm dies down and the final settlement papers are signed, life begins anew.
Preparing for this new phase of life may seem intimidating. This is particularly true when it comes to reviewing your finances and preparing for a fresh financial future. Breaking this task down into three steps can help you navigate what may seem unmanageable.
What three steps should you take? First, review your credit and start to build your individual credit score. Second, look over your investments strategies and insurance needs. Finally, prepare for taxes.
Still sound confusing? The following can help.
Establish individual credit.
Take out credit cards in your own name. Begin using them and paying them off regularly. This, and paying all bills like rent and utilities on time, can help you to build up your personal credit.
Review investments and insurance.
A recent piece in Think Advisor discussed the importance of reviewing investment strategies after divorce. Strategies should be adjusted to reflect your individual needs, instead of the needs that may have been planned for in the long term with your ex.
It is also wise to take a moment to review insurance policies. These policies are often distributed based on a beneficiary designation. Double check the designation and update if needed.
You may also need additional coverage. Start researching health, auto, renters or home owner’s insurance policies as needed as soon as possible. If you have children, it is also wise to get a life insurance policy.
Prepare for taxes.
If children are present, the divorce settlement probably dictates which parent is able to file for certain perks – such as head of household on federal returns. Review these determinations to make sure you are prepared for tax season. It may also be wise to review deductions and consider making changes where possible.