Following a divorce, looking beyond the immediate, often unpleasant, circumstances can be a challenge. However, continuing to take a long-term view of finances and life is important for the future security and well-being of your clients.
Even after the divorce is finalised and the dust has settled, it’s common for life and the future to feel uncertain. It’s understandable, after all, it’s likely their circumstances and aspirations have changed considerably in a relatively short space of time. As they adjust, it’s normal for their goals to change too. Therefore, planning the future should be among their priorities as they take the next steps.
There are many reasons to embrace long-term planning after divorce, among them:
1. Understanding aspirations: Previous goals and aspirations may no longer be what they want, even if it’s not immediately clear. Before, their objectives were likely linked to those of their spouse or civil partner. However, following a divorce is an ideal time to reassess what they want from life and how to go about it.
Clients should be encouraged to take the time to think about their personal goals and what is important to them. With a better idea of what they want to achieve, they’ll be in a better position to start setting goals for the short, medium and long term. It’s a process that can lead to greater levels of fulfilment.
2. Improving security: Once the divorce proceedings are over, it’s common for a client to feel less secure in their life than they once did. Sometimes, this can be emotional, in other cases, it can be more material, such as financial insecurity.
A long-term approach gives divorcees an opportunity to take back control, with their wider goals in mind. It’s a step that can improve security both now and in the future, as well as their mental well-being.
3. Achieve peace of mind: Whether the divorce was their decision or not, it’s likely that the whole process has been an emotional rollercoaster. Once the divorce is finalised, worries and doubts can continue to creep in for long after. It’s often the fear of the unknown that causes concerns. This is why creating a long-term plan after a divorce should be a step that the newly divorced take, helping to take back control.
Coming up with a plan to secure the future they want is the way to start the next chapter of their life.
How financial planning can help
Finances often play a big role in divorce settlements, and it’s likely that your client’s financial situation has changed significantly as a result. What’s more, money will undoubtedly impact on their ability to reach aspirations and enjoy life in a way that suits them.
Financial planning can help your clients begin to plan for the long term after a divorce has passed. We aim to help our clients understand what they want from life, and how to achieve it.
With aspirations acting as a starting point, we can help those that have recently gone through a divorce to improve their security. Divorce can be a time of financial upheaval and financial planning can help set things in order.
It’s not unusual for significant changes to have occurred due to divorce, such as moving out of a mortgaged family home, giving up a portion of a pension or losing monthly income that a partner would have contributed. With so much changing, it can be difficult to understand how financially secure they are now and what steps they should be taking.
Factors like these can mean previous financial goals and plans are no longer appropriate or, at least, need some adjustment. With aspirations and finances both likely to have shifted relatively quickly, financial planning can provide some degree of certainty and direction.
Once goals have been considered, cashflow planning can be an invaluable tool. It helps to make sense of where your client’s finances are now and how they could change in the future. Whether they’re planning to purchase property, see when they’ll be able to retire or ensure they can pay for their children’s education, it can put their mind at ease.
After the immediate financial steps are taken following a divorce, such as updating a will and closing joint accounts, financial planning should be the next port of call.
With a clearer idea of the long term, including finances, divorcees are in a better position to build the life they want. It’s a step to creating a life after a divorce has been finalised.