Make smart choices about handling money after divorce

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Glen D. Smith

By Glen D. Smith, CFP, CRPC

It would be nice to think nobody would ever have to go through a divorce. Unfortunately, every marriage starts out with a 50-50 chance of ending that way.

And if it does come to that, you’ll have a lot on your mind, but a financial advisor on your team can help ease some of your money worries and give you reassurance.

Here are a few tips for making smart choices about handling your money in your new life.

Retaining the services of an independent financial advisor — instead of relying on the ex-spouse’s advisor or solely on your own judgment — helps ensure you have a team that is dedicated to your interests, your new goals, your new life and your new direction.

A good place to start working with your financial advisor would be establishing a long-range budget that helps you transition to your new financial realities.

It’s critical to adjust to your post-divorce standard of living, especially if you’re going to end up with reduced assets and less household income, which will directly impact your ability to plan for your retirement.

Why is a budget that takes all that into account so important? For one thing, it will help you make intelligent decisions about your money.

How? It will give you a chance to think through big financial moves before you act on them.

For instance, it’s natural enough to want to make a clean, complete from your old life after the divorce, and that might include the urge to buy a new house.

Slow down. If your budget shows you how to make your money stretch to fulfill your longest-range dreams–but does not include a big move right away – it could help you avoid making a financial mistake with long-range repercussions.

Another example: Say you need a new car and have your eye on a luxury model with all the bells and whistles. Wait. Look at your budget. If it tells you how much car you can afford, you can make a smart decision.

It’s a sad fact of 21st century life that half of all marriages end in divorce. If you find yourself in that difficult time, please remember that having a financial advisor on your side will go a long way to helping you make smart money decisions.

 

Glen D. Smith & Associates, Raymond James is located at 1029 Long Prairie Road, Suite C, Flower Mound, TX 75022. (469) 212-8072.

Glen D. Smith & Associates is not a registered broker/dealer and is independent of Raymond James Financial Services. Securities offered through Raymond James Financial Services, Inc., Member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Any opinions are those of Glen D. Smith and not necessarily those of RJFS or Raymond James.

This case study is for illustrative purposes only. Individual cases will vary.  Prior to making any investment decision, you should consult with your financial advisor about your individual situation.

The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected.

Contributions to a traditional IRA may be tax-deductible depending on the taxpayer’s income, tax-filing status, and other factors. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59½, may be subject to 10% federal tax penalty.

Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

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