A divorce is usually harsher financially for any woman. In fact, a divorce means that a woman will have to live with lesser money than she had when married. And at such times, money management can be very difficult.
According to Bureau of Labor Statistics, the gender pay gap in American continues to persist. Currently, women earn only 84 Cents for every $1 that a man earns. This also puts women at some disadvantage.
And women can face more financial problems if they’ve to provide for children too.
Therefore, in this article, I will write about ways to deal with your divorce as a woman and manage finances.
Let’s start by learning a bit about divorce rates in USA.
Divorce Rates in USA
If you’re struggling to manage your finances after divorce, you’re not alone. According to law firm Wilkinson & Finkbeiner, the divorce rate for every 1,000 women in America is whopping 16.9 percent. Almost 50 percent of all marriages end in divorce or separation, according to the WF-Law website.
Furthermore, researchers estimate that 41 percent of all first marriages end in divorce or separation. About 60 percent of all second marriages and 73 percent of third marriages also end in divorce. As a matter of fact, the US ranks fourth in the list of countries with highest divorce rates, with the first three positions being taken by Russia, Belarus and Gibraltar.
The website also has some shocking facts. There’s at least one divorce in America every 13 seconds. As a result, over 15 percent of all adult women in USA are divorced.
The lockdowns of 2020, caused by the Covid-19 pandemic saw a surge in domestic violence leading to an increase in divorce rates across America. However, exact statistics are not yet available for this phenomenon. Most of these divorces during the Covid-19 period are mainly on grounds of domestic violence.
The average age for divorces is 30 years while 60 percent of all divorces involve people aged between 25 years and 39 years.
Dealing with Finances After Divorce
These figures clearly indicate that you’re not the only divorcee that could feel stressed, loneliness & financial issues after divorce. At the same time, not every woman suffers financially after divorce. That because they know how to deal with a divorce and manage finances.
Therefore, let’s look at various ways and means you could successfully use to manage finances after divorce.
Make a Financial Plan
As I mention earlier, women can sometimes bear the financial brunt of a divorce. Therefore, the first thing to do is make a superb financial plan for yourself. Calculate all your income, assets and liabilities. Find ways and means by which you can put the money you have in your savings to work and fetch you some income.
Investing on stocks, Mutual Funds, Exchange Traded Funds (ETFs), commodities and currencies is an excellent way to grow your money instead of allowing it to lie idle in a savings account. These financial instruments offer high returns over a period of time. However, you need to stay invested for long to make tangible and significant returns.
Find Side Gigs
Bridging the gap between your income as a divorcee and what you had while married isn’t always easy. Therefore, a side gig could help you overcome any shortfalls in money. There’re countless side-gigs that’re available for women. In fact, you can do a lot of them from the comfort of your house.
A side-gig not only gives you enough money but it also keeps you away from financial and other stress as well as loneliness to some degree. Its worth knowing that lots of Americans suffer from anxiety over money. And such anxiety affects divorced women fiercely. You can prevent anxiety over your financial condition by taking a side-gig or a part-time job that keeps you gainfully employed.
Think About Retirement Plans
One thing that most divorced women ignore is retirement plans. As a married couple, you might have had some plans for those golden years. However, the situation changes drastically after a divorce and you’re left to fend for yourself. Therefore, don’t ignore retirement plans. Studies across the US reveal a shocking fact: that more than 90 percent of Americans don’t have sufficient money to retire.
Surely, you wouldn’t want to be caught in this trap after divorce. Therefore, consider how and where you wish to retire, the amount of money you’ll require during those years and start planning for them right away. You could invest on annuities that would offer enough payouts when you retire. That way, you’re keeping away poverty in those golden years when you’ll be no longer working and having an active income.
Use Investment Apps
Understandably, you might not have much money from the divorce settlement and your own job. However, that’s no reason why you can’t start investing on stocks and commodities markets. Nowadays, there’re as many as five superb apps that allow you to start an investment journey with as little as $5 only. These apps include Robin Hood, Acorns, TD Ameritrade and others. You can download these apps on your smartphones for free and start investing.
You needn’t start by investing huge amounts of money if that’s not possible. Even a sum of $5 would be adequate. These apps allow you to invest in fractional shares and fractional ETFs. That means, instead of getting one full share of a company, you get a fraction worth the money you invest. And when you keep buying such fractions over a period of time, they add up to one share. This is an excellent way for any woman who’s divorced to start her investment journey.
Rework Your Health Plan
As a married couple, you might have had a health plan for the family. However, after divorce, this isn’t possible. Therefore, get your divorce attorney to rework the health plan with the insurer. And if that too is impossible, go for an altogether new health plan that suits your needs. All of us are aware that healthcare in America is very expensive. And without a good health insurance, you would have to bear these expenses from your purse.
There’re several excellent health insurances or Mediclaim plans available from various insurance firms. Consider all options before buying one. The best thing to do is shop around and find the best rates. Some insurance firms lower the premiums if you’re going for home insurance, health insurance and vehicle insurance from them. A combined plan costs lower than individual ones.
Build Your Credit
A divorce can leave your credit score in shambles. That’s not always the case, but sometimes you might be left with poor credit scores due to debts and other credit taken during your married days. Therefore, the best thing to do in such a situation is to look at how you could build your credit score once again.
There’re several ways and means to build a healthy credit score. One of these is to expedite the payment of your credit card dues. That’s because credit cards come with a stiff Annual Purchase Rate. And the longer you don’t pay the full dues, the APR keeps adding.
Having a credit card itself is good to build a credit score. However, it requires you to pay all outstanding dues on time and ensure that ARP doesn’t build up and boom beyond your control.
Shun Expensive or Large Purchases
Expensive or large purchases can throw your finances in a tailspin. Therefore, avoid these at all costs. Literally. Often, women go on shopping binges to overcome the loneliness and sorrow that accompanies a divorce. And this occurs even if you’ve been through a turbulent relationship with a partner.
Here, it’s worth remembering that they money you get as settlement or child maintenance could be one-off and hence, you need to utilize it properly. Therefore, I will again emphasize on the need to invest your money wisely on wealth building plans and retirement plans. The more you save and invest now, the more financial security you would enjoy in the future.
Get Financial Advisor
I’m aware that financial advisors don’t come cheap. However, if you’re unsure about what to do with your money and require some good financial planning advise, I recommend you consult a good financial advisor. They’re qualified to help you plan your finances for the future. Though you’ll spend a few Dollars for availing their services, it would prove to be a worthwhile investment.
A financial advisor usually has ties with banks, investment and insurance firms. Therefore, they’re aware of various plans and schemes that’re available in the market. This puts them in an ideal position to guide you on where to put your money and how much to invest on different plans to get high returns. For any divorcee, this advice can make a lot of difference in their financial life after divorce.
In Conclusion
As you can see from the above steps, managing finances for women after divorce isn’t all that difficult. The first thing you need to do is take hold of your finances and work towards securing a happier and better future for self and children if any, after divorce. Before concluding, I will add that a financial advisor can actually help you realize your financial goals. Hence, you can use their services safely, despite the cost. And if you wish, some banks and financial companies also provide robo-advisors for smaller investors to make the best of their finances. A divorce isn’t the end of the world for anyone, including you. It’s possible to get hold of your finances and live happily once again.