What You Need To Know About Your Post-Divorce Finances

What You Need To Know About Your Post-Divorce Finances

14 strategies to gain control over your money

Whether you're just thinking about divorce, in the middle of one, or moving beyond divorce, you need to be on top of your personal financial situation. Empowering women to lead independent financial lives is the premise of my book, On My Own To Feet — A Modern Girl's Guide to Personal Finance, coauthored by Sharon Kedar.

Here are a few strategies that you can use to gain control over your financial situation:

1. Strive to save 15% of your gross income.

2. Understand that if you charge something on your credit card and make only the minimum monthly payment, you are effectively paying twice as much for that item.

3. Know and protect your credit score: Its reach in your life is far and wide.

4. Guard against the unknown with an appropriate amount of insurance for your particular circumstances — healthcare, auto insurance, and homeowners insurance (if you own a car/home) — are an absolute must. If you have children, life insurance is also essential.

5. Keep in mind that it's your spending, as opposed to your income, that you have the most control over on a day-to-day basis.

6. Know that you invest for two reasons: To keep the corrosive power of inflation at bay and to grow your money faster than inflation.

7. Remember to keep the money you must spend in the next one to five years in a savings account, money market account fund, or CD. If you are under the age of 50, stocks are where the action is for money you won't need for five or more years.

8. When it comes to buying stocks, think index funds, and if you want to keep your financial life really simple, consider the S&P 500 index fund.

9. Super-size your retirement nest egg with tax-advantaged accounts.

10. Strive to keep your total monthly housing-related payments to 25% or less of your monthly gross income.

11. Strive to keep your total monthly car-related payments to 10% or less of your monthly gross income.

12. Income taxes take a big bite out of your paycheck, so you need to understand the basics of taxes to ensure no surprises on tax day (April 15th).

13. Don't let finances ruin your relationship and don't let your relationship ruin your finances. Reveal yourself, financially speaking, and commit to annual mutual financial "checkups."

14. Being financially savvy isn't magic and doesn't take an MBA. You now have the knowledge to create a secure financial future for yourself. It's time to go forth and create the financial life you've always dreamed of!

Related Articles:

5 Financial Actions to Take Before You Even Think About Divorce, by Lili Vasileff

A Crash Course on Handling Your Money, by Stacy Francis

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