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The financial changes typically brought about by divorce

When a person in Illinois is thinking of ending a marriage, it might be wise to consider the financial consequences of such a step. A divorce is not only an emotionally draining process, but it could also tap one's funds. The first matter of concern for many is the family home for which a mortgage was likely obtained on the strength of both incomes, and utilities and maintenance costs are generally also shared. Even if the court awards the house to one spouse, affordability must be considered.

The costs of maintaining a car might also be questioned. If the couple shared one vehicle, it might not be possible for one spouse to buy another car and pay for a loan, gas, maintenance and insurance on only one income. When it comes to benefits, a divorce might mean the loss of coverage previously enjoyed through a spouse's workplace benefits such as health insurance. Careful calculations may be necessary to determine whether a plan through a employer or a private insurer will be affordable.

Day-to-day living expenses for one person will not necessarily be less than for two people. Many services have fixed fees, regardless of how many people of a household use it. When there is no one with whom to split the bills, some of the services or usual expenses might have to be forfeited.

When a person is faced with all these financial realities of life after divorce, it might be difficult to even think of building up an emergency fund or any kind of savings. However, it is vital to continue saving a small percentage of every paycheck. Financial advisors say a person should build and maintain an emergency fund equal to the amount needed for three months of living expenses because there will no longer be a spouse who can help in a time of need.

At this time it might be wise to also consider a 401(k), IRA or another form of a retirement fund. This may seem overwhelming, but help is available. An experienced Illinois divorce attorney, along with his or her other resources such as financial, tax and real estate advisors can provide the necessary guidance and support to ease the process.

Source: fool.com, "Getting Divorced? Time to Rethink Your Budget", Maurie Backman, Nov. 12, 2017

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