Divorce can happen to anyone of any age or background. Even when both spouses agree that it is for the best, it doesn’t mean that the process is easy. Divorce means a great deal of change for everyone involved.
Though you probably realize that divorce can affect your finances, you may not realize just how much. Many people say that they didn’t predict how far-reaching it could be. Being prepared for the financial implications of divorce here in Virginia can make all the difference. If you’re considering splitting with your spouse, here’s what you need to know.
How divorce affects your spending
Many people don’t stop to consider just how many expenses they share with their spouse until they get a divorce. Suddenly, only one person’s income is available to cover bills and day-to-day costs. It can be very shocking for some people to have to handle a household all on their own. Unexpected bills, like car repairs or medical expenses, can be even more tricky to cover with just one person’s income.
Another thing each person will have to handle on his or her own is credit. Many married people share lines of credit, have their spouse’s name on their credit card and share a mortgage and other debt. Experts say that, whenever possible, each spouse should try to have lines of credit in his or her own name to build up his or her own credit history.
How spousal support affects your finances
Some divorce agreements contain provisions for spousal support, especially if one spouse was the sole breadwinner and the other took care of children and the marital home. Many people don’t realize how significant that cost is, even though it may be necessary. Paying spousal support may influence how much a person gets to spend on him or herself after making the payment.
If one spouse has a change in financial circumstances, it may warrant altering the spousal support agreement. The process takes time, but it may be very important, to either the paying or receiving spouse. This could happen if one spouse experiences a job change, remarries or acquires a significant amount of money.
How divorce affects your financial future
Upon the finalization of their divorces, many people may think that’s the end of things, but a person’s financial future can also change. Many people find that their taxes go up after divorce because they have to file as a single person instead of married filing jointly. Though that’s not a reason to stay married, it can be a shock to some people when tax season rolls around.
Retirement savings are also divided in most divorces. Some people find that they go from feeling sure about their retirement fund to uncertainty. Again, this doesn’t mean people should never get divorced, but people in this position may want to ensure that they have a plan for boosting their retirement savings.
The future can still be bright
Despite all these warnings, if you are considering divorce, it’s not out of your reach. The process requires care and diligence. Employing the help of professionals is the best strategy to ensure that you are ready for your financial future.