Recently divorced or widowed? You’re not alone. Between the country’s divorce rate and the fact that women continue to outlive men, the reality is that many women will suddenly find themselves single at some point after marriage.
You may be feeling overwhelmed by all of the changes, not to mention the emotional impact of your specific situation. And, as you transition from a dual- to a single-income family, you may even have some financial concern. Below, find five tips to help you keep your finances in order, both now and in the future.
Create a personal roadmap
If you had a financial plan as a couple, you may now want to reconsider whether your goals still make sense. For instance, you’ll want to talk to your advisor about your own personal goals (and set new ones, if necessary), where you want to be a year from now, and what your financial future looks like beyond the next 12 months. Review your plan regularly to see how you’re progressing, and adjust along the way as circumstances change.
Make a budget (and stick to it)
You may or may not have shared the household bills in the past, but now is the time to revisit of all of your monthly fixed expenses, including housing, food and utilities. Once you’ve determined those fixed costs, and budgeted for savings and investments, you’ll know how much you have left over for discretionary spending based on your own income. You may find you’re able to support the lifestyle you were used to, or you may need to make adjustments.
Find additional funds
You’ll want to make sure you’ll receive any benefits you’re entitled to if you’re recently widowed. For instance, your partner may have had life insurance or an annuity. If you’re divorced, meanwhile, it’s a good idea to investigate whether you’re being paid enough alimony and/or child support, especially since a significant number of women aren’t getting what they’re owed.
While it’s generally not a good idea to tap into your RRSPs before retirement, if you’re looking to re-enter the workforce or accelerate your career now that you’re living on a single income, you may want to consider the Life Long Learning Plan (LLP). Speak to your tax and financial advisors about what’s available to you.
Re-evaluate your estate plan
If you and your spouse had wills or an estate plan, they’ll need to be updated to reflect changes in beneficiaries and power of attorney. Many people believe that divorce automatically revokes their will, but you should always speak to your legal advisor. Depending on where you live, some rules may differ, but generally if you get a divorce, only the parts of the will that refer to your spouse are revoked. The rules around wills and estate plans in relation to common-law partnerships may differ from province to province, so it’s a good idea to seek legal advice if you separate from your common-law partner as well.
Update asset beneficiaries
It’s also important to keep in mind that beneficiaries named for certain assets like RRSPs, RRIFs, life insurance and pensions are not revoked automatically by divorce or separation, so speak to your advisor about revising these documents, as well.