How to Keep Divorce From Devastating your Family Finances

While divorce increases the financial burden on any family, it is still important to have a balance where you ensure that the children remain relatively unaffected by the whole ordeal. Despite not entirely being on good talking terms, the spouses need to devise a plan that allows support for their kids.

Instructions

  • 1

    All will not be about money

    The divorce may leave one spouse into a financial meltdown and the other fairly healthy, but it is necessary that you still do what is best for your child. Visit a financial planner and ask him/her to plan a constant income flow for your child. You may include a mediator of your own choice, who sets up a trust from your money.

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    Savings account

    You may agree to set up a savings account for your child which comes in handy when he or she needs money for week-long school trips. However, this account is different from the daily expense account. The spouses must decide on the specific amounts they are willing to contribute on a monthly, quarterly or bi-annual basis, which allows the child to support himself/herself in unexpected circumstances.

    Creating a joint checking out account for your kid could be an option or you could simply use the credit card facility. This way the kids won’t need to constantly look out for financial help whenever they run into difficulty, while parents will have a check on the transactions made by their child.

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    Investing for long term

    Ideally, in order to ensure that your child has sufficient funds for a secure future, you can pursue many long term options. First could be investing in saving bonds with longer maturity. The parents can pay periodically or one time for saving bonds which have lower risk as compared to other investments.

    Purchasing a life insurance policy will also give financial cover if a parent dies. You can tell the insurance company that the claims must directly go to the kid, or his/her guardian or the ex-spouse. Investing in mutual funds will also help you avoid risk.

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