22 April 2013 0 Comments

Post-Divorce & Finances

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It can be challenging to get back on track and now dealing with one less income after a divorce requires organization. There are so many things to consider for example Alimony, child support and any other extra expenses or income you now have to take into account.

1. Take stock. Itemize your monthly expenditures. (Always count on a little extra for unexpected and irregular expenses….stuff happens.) Then determine your monthly sources of income–your salary, alimony, child support and investment income—interest, dividends, etc. Subtract your expenses from your income, and you know what you have to spend.

2. Create  a reasonable spending plan one that meets your needs as well as keeping in mind you budget. the idea is to keep it simple at first once you have set a routine and have better management it will be easy to give yourself some luxury.

3. Plan ahead for life after alimony. Look for ways to increase your income. Take a new job or go back to school to update your skills and education. Expand the hours you devote to your current one. Plan a later retirement. Make wise investments. Or it may mean you can begin to save for retirement or maybe a vacation.

4. Balance your checkbook. Remember to pay your credit cards on time you dont want to go into debt, and keep your bills up to date.

5. Pay your taxes. You must report and pay tax on alimony. Your ex-spouse will report it as a deduction, so you are likely to be audited if you do not list it on your tax return. Child support, on the other hand, is NOT taxable. making sure you report and do your taxes correctly will keep you out of trouble with the IRS.

Divorce is becoming more popular in people over 50, in that case it will require more planning for such things like retirement and thorough financial planning because income may be tighter and there are many more things to consider, like property and savings, as well as your health. It may be more challenging to have a clear agreement on all the division of goods. Consult an attorney for expert help in property division, support and the overall processes of a complex divorce.

At Holstrom, Sissung, Marks & Anderson, we have over 40 years of experience in these matters and are ready to aid you in getting your life on the right track.

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