Recovering financially following the end of a marriage can be difficult for Pennsylvania residents without careful planning. Ideally, planning for a post-divorce financial life should begin as early as possible, preferably while the case is still pending. By planning early, it is possible to avoid many of the most common financial pitfalls newly-single people may face.
A good start for post-divorce financial planning is to take a thorough look at the expected post-divorce income and debts. Using that information, people should then make a budget that allows them to meet their needs while also living within their means.
Including retirement planning is an important part of a solid post-divorce financial plan. People should think about what they can afford to contribute in order to make sure they will be able to later comfortably retire. Outlining financial goals can help to guide the plan. People should put their financial plan in writing so they have a guide to which they can refer. Setting up such things as automatic savings is important, as is building up an emergency fund with at least six months of income set aside. After the divorce, people need to update their wills and other estate planning documents. They should also remember to change their beneficiary designations on their retirement accounts and life insurance policies if their former spouse had been named.
The divorce process is normally highly emotional for people going through it. People should not lose sight of their future financial needs during this period. They may want to discuss their financial futures with their family law attorney. Their attorney may help them to think about what different categories of finances they should consider. An attorney may also help to negotiate a settlement that will best protect the client’s financial interests going forward.