Ending a marriage can lead to significant financial and emotional turmoil. Ideally, Pennsylvania residents who are in this position will address the potential financial changes that a divorce can bring head on. This means taking a look at how much money they are making as well as what a person’s expenses are after the marriage ends. It can also be worthwhile to account for paying off some or all of joint debt accrued with a former spouse.
In some cases, creditors can come after a person for joint debts even if he or she didn’t know about them. To prevent surprise claims, individuals can obtain and review copies of their credit reports. Consulting with a financial adviser can make it easier to develop savings targets and find ways to increase retirement savings. In a divorce, individuals may lose some or all of their retirement assets, which can make replenishing a 401(k) a top priority.
It can also be important to consider other costs such as paying for insurance or to pursue educational goals. These expenses can play a role in determining a person’s cash flow as well as what money management strategies should be utilized to achieve greater financial security. After a divorce, it is often a good idea to review an estate plan and change beneficiaries on retirement accounts or life insurance policies.
Hurt feelings at the end of a marriage may cause people to make decisions based on emotion as opposed to facts. However, making poor decisions during the divorce process could result in negative financial consequences in the future. Therefore, it may be in a person’s best interest to consult an attorney. Legal counsel may be able to look at a case from an objective perspective and help to negotiate a favorable settlement.