Surviving Financially for a Stay at Home Parent after Divorce

financial plan after divorce

The uncertainty that comes with getting a divorce is stressful for anyone, but for a stay at home parent, the prospect can be frightening. When you have no income of your own and you are entirely dependent on your spouse, it makes you extremely vulnerable financially if the marriage dissolves. Stay-at-home parents have a difficult road to travel during a divorce, but the important thing to remember is that you are not the first one who has been through this, and if others have been able to get through it, you can too.

Surviving financially for a stay at home parent after divorce means taking a detailed look at your current situation and coming up with an effective game plan for life after the divorce is finalized. Here are some important steps to get you started:

Understand the Family Finances

As soon you become aware there is any chance of you and your spouse getting divorced, start gathering and making copies of your family’s important financial documents. This includes income information, like tax returns and W-2s, and also expense information, like how much your mortgage, insurance, utilities, car payments, etc. cost on a monthly basis.  It also includes asset and debt information, like retirement statements, credit card statements, and the like. You may or may not be the one who handles the finances in the household, or maybe both of you share in this responsibility.

Regardless of the current arrangement, you are going to need to quickly learn as much as you can about areas like your household income, how much money you have in the bank, how much you have in retirement investments, how much equity you have in your home, and how much you owe in credit cards and other loans. Do this as quickly as possible before your spouse has a chance to distort or hide anything.

Find a Safe Place to Keep your Important Stuff

If you are facing a divorce, it may not be safe to leave financial documents and other important belongings in the house. During the chaos of a marriage dissolution, things have a tendency to “disappear”. Reach out to a trusted family member or friend and ask them if you can store some of your things at their place. If that is not an option, you may want to consider getting a safe deposit box at the bank or renting a storage unit temporarily.  You can also scan important documents to a secured email account, so you will have access to the information even if you lose track of the hard copies of the documents.

Take Steps to Protect your Credit and Plan for Emergencies

When you get out on your own, it will be highly beneficial to have good credit and some money tucked away for a rainy day. During the transition out of your marriage, there are likely to be some financial challenges, and you may need to draw on your credit and/or from your savings. If you do not already have these, open a bank account that is in your name only and start putting as much as you reasonably can into this account.

For example, if you currently have a joint savings account, you should be entitled to take out half of what is in there. It is best to do this now before your spouse takes any action to drain the account. It is also a good idea to apply for some credit cards in your name only (if you don’t already have some) and close or remove your or your spouse’s name from joint credit accounts so your spouse cannot run up debt that might damage your credit.

Carefully Plan your Housing Situation

Clearly, one of the most important things you will need to resolve during or after a divorce is where you are going to live. Although you may be emotionally attached to your marital home, you also need to take a cold, hard look at the numbers and make sure it makes sense financially for you to stay there. If the housing payment and utilities for your current home are beyond what you can afford, then it may be time to look at downsizing. Even if you can afford the monthly payments, if you have significant equity in your home without other assets to offset that value, you may not be able to afford to pay your spouse his/her portion of the equity in the house.  This is another area where a friend or relative might be able to help out by giving you and your kids a place to stay temporarily while you figure out your long-term housing situation.

Think about Re-entering the Workforce

Although you may eventually receive child support and possibly alimony as well, this may not be enough to make ends meet, or it may not be enough for you to enjoy the standard of living you aspire to. We understand it is a scary step to look for a job when you have been out of the workforce for a while, but for many, it is also a worthwhile step that helps put them on the road to financial independence. Think about what skills you have, education you may need, daycare arrangements for the kids, and other issues that would need to be addressed, and decide if it makes sense for you to start working again.

Meet with an Attorney ASAP

When you are getting divorced as a stay at home parent, part of surviving financially will be making sure you are able to secure a divorce settlement that fully protects your financial interests. During a time like this, it is important to have a strong legal advocate in your corner – someone who not only understands the law, but someone who also cares about your situation and is committed to making sure you come out of your divorce in the best possible financial position. Meet with a trustworthy attorney at your earliest convenience, so you can begin planning your path forward knowing you have the skilled legal guidance and moral support you need during this difficult time.

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