Divorce is a painful experience that we wouldn’t wish on anyone. Just when you think that everything is going well and there isn’t a cloud in the sky, the clouds burst all around you. Now there’s a storm that you can’t escape from. Whether you know that you need to divorce or the divorce is a surprise to you, there are significant financial concerns to consider. In the UK, the court system is pretty solid. Things can be as clean or as messy as you’re willing to sort out with the solicitor. You don’t want to drag a divorce out, because it just means more solicitors fees in the long run.
But that isn’t the only thing that you need to think about. You need to think about your post-divorce financial life. For couples that feel like they’ve been married forever, that can be really hard. Here are a few tips for people that are going through the incredibly painful process of divorce.
1. Restore Income
Income is the first area that you need to look at. There are agencies that can help you find a job, especially if you’re being plunged into a low income status. You might have a bit of spousal support coming your way, but don’t get lulled to sleep by this! It’s very common for people, mostly women, to get spousal support then be in a bad position when they don’t have any way to get a job afterwards. Don’t put yourself in that position at all! Practice interviewing! Network strongly, and you’ll find yourself being able to take on quite a bit of work.
2. Rebuild Savings
Once you get the good job that you’ve been dreaming about, you might be tempted to buy yourself all of the things that were denied to you during the divorce. Don’t do that either! Instead, you should try to put as much as you can into savings. Take advantage of the new ISA rules, where you can sock away 15,000 GBP tax-free every year. Why wouldn’t you want to do that? 🙂
3. Rebuild Credit
Now, you might find that credit doesn’t belong here, but we would have to disagree on that. Credit is a strong tool that you can use to buy the things that you want later on. Don’t you want a new car? Or perhaps a new house? Even if you’re just going to rent a flat, you’ll need to have an excellent credit rating. These days you just can’t go without credit very long. If you have any fancies about traveling anytime soon, you’re going to have to carry at least one credit card for emergency’s sake. They have the best travel insurance protection built into them, and they make it a breeze to check in and out of international hotels. Try doing all of that with a typical bank card. The levels of liability are also lower on a credit card than on a bank card. So if that card gets stolen, you have to quickly report it otherwise you’re going to be on the hook for a lot of that money. This is different with a credit card, where you really aren’t liable for it as long as you give them a call and have the card cancelled.
Rebuilding your credit can be difficult if you never really had credit to begin with. When you’re married, it’s shared credit between you and your spouse. That applies to the marriage only. A lot of people have found themselves unable to really get any credit cards after the marriage because they weren’t able to establish any credit on their own. Instead of getting joint credit cards, you should have gotten things in your name only. But alas, people like to go on convenient terms, which isn’t always a bad idea. There are second chance credit cards that you can take if your credit is really bad. But if you just don’t have much credit history, they make credit cards for this purpose as well. Nonexistent credit history doesn’t mean that you have bad credit, it simply means that you have to start over like most people do.
Be aware that this is a process that can take a lot of time. Don’t get discouraged if you don’t have a high credit rating overnight. As long as you pay your cards off on time, every single time, as well as keeping a fairly low balance, your credit score will improve. Late payments are the top way that people struggle with credit.
Your finances after divorce matter big time, especially if you have children. You don’t want to get to the point where you can’t take care of them, or plan for your retirement. State pension isn’t necessarily going to take care of much, so you have to take matters into your own hands.