Tips for Staying on Track both Physically and Financially After a Divorce
Health has been a major topic of discussion lately as we live through the coronavirus pandemic, but how healthy are your finances? Have you been tracking your finances daily, worrying about what’s next? Have you recently moved your investments to cash? Are you on track to achieve your long-term goals post-divorce? The answers to these questions can help you determine your financial wellbeing. There’s no doubt that the challenges of 2020 have been difficult for all of us, especially those who have recently experienced a divorce, but with great difficulties come great opportunities for growth, both personally and financially.
Let’s focus first on physical and mental health. Few of us could have anticipated that this pandemic would last as long as it has, but we’ve now been living through it for the majority of the year. While everyone is feeling the effects, the stress and uncertainty of a recent divorce may be adding to your anxiety about the future. What have you been doing during this stressful time to stay healthy and safe? If you need to get back on track, the following tips can help:
- Avoid too much exposure to the news – Take breaks from watching, reading and listening to news stories. You have enough stress adjusting to your new normal following your divorce, and over time, too much exposure to bad news can take an emotional toll. Instead, try to disconnect from bad news and enjoy your hobbies and loved ones.
- Take care of your body and mind – Try to eat healthy, well-balanced meals, start a daily exercise routine and get plenty of sleep. A long walk can do wonders for your mental state.
Don’t forget to stay connected with family and friends through phone calls and video conferences. It’s an important time to foster a strong support system and maintain a healthy network of friends and family members.
- Practice gratitude – Take time to appreciate what you have in life and to be thankful for those working overtime during the pandemic. Smile at people you meet along the way, even if that smile is hidden by a mask.
- Volunteer – Think it’s impossible to volunteer during the pandemic? Think again! Many charitable organizations have found ways to enlist virtual volunteers. Seek out ways to give back to your community. Not only does volunteering allow you to help others, it also helps counter the effects of stress, anger and anxiety. It’s a win/win for both you and the organization.
Next, let’s consider your financial health. It is a great time to dust off your financial plan and make sure it remains on track with your current goals and your new situation. The following tips can help improve your financial health:
- Establish an emergency savings account – Make sure you have enough liquid savings to cover three to six months of expenses should an unexpected emergency arise. This has been extremely important during the pandemic when many jobs have been cut back or eliminated.
- Practice the 72-hour rule – Spending so much time online has made it all too easy to go overboard with our online shopping. If you’ve been spending more than your budget on online purchases, consider implementing the 72-hour rule. Leave items in your shopping cart for 72 hours. If after that of time you still want the item, purchase it. If you don’t, remove the item from your cart and save the money you would have spent.
- Consider refinancing your current mortgage – With mortgage rates near record lows, now may be a great time to consider refinancing. The rule of thumb is that it likely makes sense to refinance if the current interest rate is 1 percent or more lower than your existing rate.
- Revisit your financial projections – Reassessing your financial projections following your divorce may help ease your financial worries and allow you to better understand what adjustments, if any, you need to make to your financial plan.
- Evaluate your financial advisor – During stressful market swings like we’ve recently experienced, it’s especially important that your financial advisor is communicating with you and taking advantage of every opportunity within your financial plan. Take time to understand your investment costs as well as your advisor’s fee schedule. What services are you receiving for the fees you pay? Is your advisor taking a holistic planning approach or solely focusing on investments? Does your advisor understand the unique financial challenges faced by recently divorced clients? Last, but certainly not least, make sure your advisor is a fiduciary, meaning that he or she is under a legal obligation to put your best interests first.
At Creative Planning, each of our dedicated teams specializes in working with divorced clients and includes an attorney, CPA and a CERTIFIED FINANCIAL PLANNER™ practitioner. These experienced professionals will work with you to develop a personalized financial plan that takes into consideration a wide range of factors, including your settlement agreement, current financial situation, goals for the future and any challenges you may face along the way. If you’d like help creating a financial plan following your divorce, please schedule a call.