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How will divorce affect your finances?

One thing that frightens some people about divorce is that they have to learn to live on a single income. When you’re accustomed to having two incomes in the home, this is a major difference. It can affect the standard of living for you and your children in numerous ways.

While you may be able to receive alimony and child support, it’s usually best if you can cover at least the basic bills without those. This can help you if they ever get delayed or stop. Consider these financial points if you’re going through a divorce. 

Your credit might be negatively impacted

Your creditworthiness might be affected by the divorce. This can happen because your debt-to-income ratio changes. It can also occur if the property division splits up the debts and your ex refuses to pay the ones they’re assigned. Because divorce is a civil matter, creditors don’t have to abide by the terms of the split, which means they can seek the money from you and show the debt on your credit record.

Small changes in income can be challenging

When you have two incomes in the home, one may be able to pick up the slack if something happens with the other’s earnings. When you’re handling it all with your income, it can be a challenge if your income dips or you have an unexpected expense. Start to save money so you’ll have an emergency fund if you need it. 

Going through a divorce means that you need to carefully consider how every decision you make will impact your future. As you’re going through the property division part of the divorce, be sure that you consider what the options will do to your finances. While you might be tempted to hang on to certain assets, they might be too much of a drain on your finances. Work with someone who can help you to look at the honest truth to determine what you can realistically handle in your divorce.