Alimony can help you get back on your feet after a divorce. If your role in the marriage was to take care of the home and raise children, you might lack earning power at the time of your split.
While spousal support can ease some of your financial strain, it is important to take proactive steps to rebuild. Using your alimony wisely can make a difference in your long-term well-being.
Do not rely on alimony
Even though the court might order your ex to pay you alimony each month, whether your ex complies is a different story. Never rely on those payments to get you through each month. Create a new budget that accounts for each of your expenditures. Reign in your spending and prioritize saving. Find creative ways to increase your income and live conservatively for a time. If your ex pays alimony regularly, put the funds straight into a savings account. Choosing not to rely on the payments will make it so you can still get by even if your ex is not reliable.
Understand tax implications
According to federal tax law, there are tax implications when you accept alimony payments. The IRS says that any alimony payments you accept counts as income on your tax statements. Failing to report your taxes correctly could have costly legal repercussions. While you adjust to an independent lifestyle and prepare to file your taxes as a single person, you may want to rely on a professional to double-check your work and make sure you have not missed anything important.
Alimony might not last forever. If your earning power increases or your ex loses a job, alimony payments could end temporarily or permanently. Your diligence in creating your own financial stability can make a considerable difference in your ability to succeed after your divorce.
