Quelling Financial Fears About Divorce: A Practical And Emotional Guide
Divorce is often synonymous with fear and uncertainty, especially when it comes to finances. financial fear. The fear of being left with nothing, not having enough to support yourself, the fear of losing stability, or the fear of making costly mistakes during a divorce can paralyze you. However, fear thrives in the unknown, and the more knowledge you have and clarity you gain, the more you will feel empowered as you move through your divorce.
As a divorce mediator, therapist, lawyer, and single mother of three, I know firsthand how financial anxiety can prolong conflict, cloud your judgment, and interfere with taking positive steps forward. Fear and uncertainty can make an already difficult situation even more stressful. But, with the right information and attitude, you can approach your divorce with confidence and a sense of empowerment. Here’s how.
FACE THE FEAR WITH FACTS.
Fear grows when you lack information, make assumptions, and focus on worst-case scenarios. The first step toward empowerment is clarifying your rights and financial landscape.
Gather financial documents: Make a list of all bank accounts, mortgages and other loans, other debts, assets, and income sources.
Get a realistic picture of your post-divorce budget: Make a list of all monthly income sources and typical daily expenses. You can use the form FL-150 as a guide. Evaluate where adjustments may be made if needed.
UNDERSTAND HOW DIVORCE MAY IMPACT YOUR FINANCES.
Health insurance: Will you need to obtain health insurance on your own? How much will it cost?
Taxes: Changing your filing status, potential capital gains, and other tax implications may come into play when dividing marital property. Consulting with a an accountant or tax advisor can go a long way toward better understanding of tax consequences during divorce.
Retirement accounts: Different approaches to diving retirement accounts may have different tax implications or potential for penalties.
WHILE MARRIAGE MAY BE ABOUT LOVE AND ROMANCE, DIVORCE IS A BUSINESS TRANSACTION (AT LEAST IN PART).
Divorce may be highly emotional, but when it comes to finances, approaching the process with a business mindset can be crucial. The more you can detach emotionally from financial decisions, the better.
Avoid using money as a weapon or proof of fairness. Instead, focus on the long run and how your decisions today will impact your life tomorrow.
Think about the big picture. Fighting for an asset you cannot afford (like a house) may not be in your best interest. Sometimes, the benefits of selling the family home provide the financial security you may seek.
DEVELOP A PLAN FOR FINANCIAL INDEPENDENCE.
While navigating finances alone may seem daunting, Financial independence fosters empowerment and a sense of well-being. Independence may take time, but, with persistence and the right attitude, you can find your way.
Start with a financial plan: Work with a financial advisor to create a roadmap.
Set realistic financial goals: Whether it’s staying in the home or buying a new one, saving for retirement, or starting a business, planning ahead helps decrease financial uncertainty.
YOUR MINDSET MATTERS.
Financial fears often develop from deep-seated beliefs about yourself, your worth, and your ability to take care of yourself, and these beliefs create a scarcity mindset. If you tell yourself, “I’ll never be okay financially,” your brain will look for proof of that belief. However, if you adopt the mindset, “I can handle this, and I will find a way forward,” your mind will naturally gravitate toward finding solutions.
Divorce is a financial shift, but it doesn’t have to be a financial disaster. With the right knowledge, support, and mindset, you can emerge from your divorce thriving, not just surviving.
If you or someone you know is considering divorce and have financial questions or questions about flat-fee divorce mediation, please call PXP Mediation today at (310) 486-8842.