Depending on the financial dynamics of your divorce, you may consider whether or not to re-enter the workforce. Maybe you are still in prime working years and you are reentering after being a stay-at-home parent. Or, perhaps you are nearing retirement age but unsure if you will have enough money to retire comfortably and therefore are looking for a lower-commitment job to supplement other savings.
Reentering the workforce post-divorce is not a decision to take lightly and there are often strong financial reasons to do so. In this post, we outline four considerations for reentering the workforce and discuss the financial implications of your decision.
- Identify your network
Often, getting a job relies heavily on who you know. This may be even more true if you have been out of the workforce for some time. Identify where you might have colleagues that can support your career ambitions. If your professional network was closely tied to your ex, get involved in professional groups, events, and social media networks to rebuild connections with important professional influencers.
As you consider this decision, research market conditions or network with others to understand how competitive the current job market is and whether that will be an added challenge if you have been out of the workforce for some time. In addition, research the state of your industry. Some industries change quickly and you may have to get up to speed through podcasts, events, certifications, or other opportunities.
- Decide if you are ready
If you are in the middle of a difficult divorce with your ex, you may not have the mental capacity to take on a new job successfully. Be honest with yourself if you are in too much transition to take on a new job and choose to delay the decision. Putting together goals or a timeline can be helpful if it is something you think you want to tackle in the future.
In other cases, a job may be a positive place to focus your energy and time. Working can provide a distraction or the feeling of moving forward and taking control of your life.
In some cases, if there are enough financial resources where needs and obligations are being covered, holding off until support orders are established in your divorce also can help you understand how much money you’ll need to supplement support from your ex. In other circumstances, if support calculations include income for you that you do not yet have (referred to as imputed income), getting a job may not negatively affect your support numbers. In situations like this, the sooner you start making income, the more financial stress will decrease, resulting in more financial flexibility, financial freedom and can build a sense of independence. Always discuss the best approach with your attorney first.
- Consider roles that complement your lifestyle
As a single parent or unmarried individual, you now have a new lifestyle and likely less support post-divorce. Take that into consideration when choosing a new job. For example, if you have part-time parenting duties, taking a job with overnight travel, nighttime hours, or a long commute might not be an option until you are settled into a more regular routine post-divorce. These considerations might change depending on the age of your children. If a new job requires learning a new skill, ask yourself if you have the time and mental bandwidth to do that post-divorce. In some cases, a work-from-home role might be ideal and in other cases, getting out of the house and around others might be a great step for you post-divorce.
Evaluate your current skills and experience and consider how you can apply them to a role. You may surprise yourself! Being a full-time parent requires multi-tasking, scheduling, organization, decision-making, leadership, and so many other life skills that are applicable in the workforce.
If you are considering going back to school, understand that it is an investment that may require budgeting and sacrifice. Reaching your goals and doing what you love for a living is important, but it is also wise to make sound financial decisions that will pay off in the future.
- Establish your salary expectations
As you consider going back to work, understand what salary ranges you need to achieve the lifestyle you want. Drafting a post-divorce budget is a critical step to understanding your salary needs. In addition, work with your attorney and financial experts to understand how you should receive or pay support agreements and any lump sums you might receive or pay in your divorce.
When you are evaluating salary, consider the total compensation package including employee benefits such as health insurance and employer retirement contributions. A position that offers health insurance can save you hundreds of dollars each month. Healing emotionally (and even physically) after divorce is your responsibility and having health insurance coverage will provide you the ability to move forward and heal. Employer retirement contributions are a considerable benefit as one of the most common financial challenges non-working post-divorcees have is the inability to save as finances have become so strained. Many employer retirement plans offer contributions to help you save in addition to your own savings.
Understand additional expenses you may take on if you go back to work and add them to your budget. Examples of these include:
- Pet Care
Most people decide to reenter the workforce out of financial obligation. Getting clear about whether you need to go back to work based on your divorce agreement and financial goals often takes the help of a financial expert. Have you created a budget to understand your post-divorce financial situation and even used that information to negotiate an ideal division of assets? Contact our team for a free consultation to learn how we can help you understand more about your financial situation and whether you need to reenter the workforce.