Adjusting to Life Financially after a Divorce For ConocoPhillips Employees

According to a study by the National Bureau of Economic Research, the average wealth of divorced women over age 50 is 50% less than that of married women in the same age group. This means that many women may need to adjust their financial plans and strategies after a divorce to ensure a comfortable retirement. Seeking out financial advice and creating a new budget can be important steps towards managing finances after a divorce. Additionally, exploring options for Social Security benefits and insurance policies can also be beneficial. By staying informed and proactive, those who have gone through a divorce can successfully navigate the financial challenges that may arise. Source: 'The Financial Consequences of Divorce for Women Over 50,' National Bureau of Economic Research, September 2018.

Unquestionably, going through a divorce can be an emotionally trying moment. The process of negotiating a divorce settlement, attending multiple court proceedings, and dealing with competing attorneys can be taxing on the parties. In addition to the emotional impact that a divorce can have, it is essential that ConocoPhillips employees in this situation understand how their financial situation will be affected. Now, more than ever, you must ensure that your financial situation is in order. You will then be able to leave the past behind you and establish the financial building blocks for your new financial future.

Assess Your Current Financial Situation

You'll need to get a handle on your finances and evaluate your current financial situation after a divorce, taking into account the probable loss of your ex-spouse's income. Additionally, you may now be liable for expenses that you previously shared with your ex-spouse, such as housing, utilities, and auto loans. Eventually, you may realize that you are no longer able to maintain the lifestyle you enjoyed prior to your divorce.

Establish a Budget

These ConocoPhillips customers should begin by creating a budget that reflects their current monthly income and expenses. In addition to your regular salary and compensation, you should also include income from dividends and interest. Include alimony and/or child support payments if you will be receiving them. Regarding expenses, you should prioritize categorizing them as either fixed or discretionary.

Included in fixed expenses are accommodation, food, and transportation. Included in discretionary expenses are entertainment, travel, etc. Consider that you may need to reduce some of your discretionary spending until you acclimate to a lower income. However, it is essential not to completely deprive yourself of the things you appreciate. You will need to provision for the occasional reward (such as yoga class or dinner with friends).

Reevaluate/Reprioritize Your Financial Goals

The next step for these ConocoPhillips customers should be to reevaluate their financial objectives. During your marriage, you and your spouse may have established certain financial objectives. Now that you are an independent adult, these objectives may have changed. Begin by composing a list of the objectives you wish to accomplish. Do you need to increase your ConocoPhillips retirement savings? Are you considering returning to school? Would you like to save money for a house?

Additionally, you should reorder your financial objectives. You and your spouse may have intended to purchase a beachside vacation property. After your divorce, you may find that other objectives take precedence, such as ensuring that your cash reserve is adequately funded.

Take Control of Your Debt

Ensure that you take control of your debt and credit while transitioning to your new budget. We recommend that these ConocoPhillips customers resist the temptation to rely on credit cards for indulgences. And if you have debt, you should devise a plan to pay it off as soon as feasible. The following advice will assist you in paying off your debt:

• Keep an eye on account balances and interest rates.
• Create a strategy for managing payments and avoiding late fees
• Pay off debts with the highest interest rates first.
• Utilize debt consolidation and refinancing options.

Protect/Establish Credit

Given that divorce can have a negative impact on your credit score, we recommend that these ConocoPhillips customers take measures to protect their credit history and/or establish credit in their own names. A positive credit history is essential because it will enable you to obtain credit when you need it and at a lower rate of interest. Employers sometimes regard excellent credit as a requirement for employment.

Examine your credit report for any mistakes. Exist deactivated or refinanced joint accounts? Are there any identities that need to be changed in the report? Once a year, you are entitled to a free credit report from each of the three main credit reporting agencies. annualcreditreport.com is a website where these ConocoPhillips customers can access additional information.

To establish a positive track record with creditors, pay your monthly bills on time and attempt to limit the number of inquiries on your credit report. Such inquiries are conducted whenever you register for a new credit card.

Review Your Insurance Needs

In most divorce settlements, insurance coverage for one or both spouses is negotiated. However, you may require additional insurance coverage beyond what was available through your divorce settlement. Regarding health insurance, we recommend that these ConocoPhillips customers prioritize adequate coverage. The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows you to obtain temporary health insurance coverage (up to 36 months) if your divorce decree does not require your spouse to provide you with health coverage.

Featured Video

Articles you may find interesting:

You may also consider purchasing individual coverage or, if you remain an ConocoPhillips employee, ConocoPhillips coverage. You'll also want to ensure that your disability and life insurance policies meet your requirements now that you're independent. This is especially true if you are reentering the workforce or if you are the child's custodial parent.

Finally, these ConocoPhillips customers must ensure that their property insurance coverage is current. Any applicable property insurance policies may require modification or rewriting to reflect changes in property ownership resulting from your divorce.

Change Your Beneficiary Designations

After a divorce, you should update the beneficiary designations on your life insurance policies, retirement accounts, and bank and credit union accounts. Please remind these ConocoPhillips customers that a divorce settlement may require you to retain a former spouse as a beneficiary on a policy, in which case the beneficiary designation cannot be changed. Also, now is an excellent time to create a will or revise an existing one to reflect your new status. Verify that your ex-spouse is not named as a personal representative, successor trustee, beneficiary, or bearer of a power of attorney in any of your estate planning documents.

Consider Tax Implications

You must also consider the tax consequences of your divorce. Your income sources, filing status, and the credits and/or deductions for which you are eligible may be impacted. You may have new sources of income following your divorce, such as alimony and/or child support, in addition to your regular salary and compensation. In addition, your tax filing status will change. The filing status is as of the final day of the tax year (December 31).

This means that if you were divorced on December 31, you would be deemed divorced for the entire year for tax purposes. Depending on whether you are the custodial parent, ConocoPhillips customers who also have children may be eligible for certain tax credits and deductions. These may include the child tax credit, the credit for child and dependent care expenses, and tax credits and deductions related to higher education. We recommend that these ConocoPhillips customers consult a tax expert about their specific situation.

Consult a Financial Professional

Although it is possible to acclimate to a new financial situation on one's own, these ConocoPhillips customers should still consider consulting a financial professional for assistance. In addition to assessing your needs, a financial professional can work with you to construct a plan to help you meet your financial objectives, make recommendations about specific products and services, and monitor and adjust your plan as necessary.

Conclusion

Adjusting to life financially after a divorce is like navigating a ship through stormy waters. Just like a captain who has to adjust their course and tactics to avoid obstacles and stay on track, divorcees also have to make adjustments to their financial plans and strategies. The wind and waves may be rough, but with careful planning, sound decision-making, and perseverance, the ship can eventually reach calmer waters. Similarly, with the right mindset and resources, divorcees can successfully navigate the financial challenges that come with divorce and eventually regain financial stability.