As the divorce process closes in on you, it’s natural to have concerns about your finances. How will you live on one salary? Can you afford all your expenses? Will you have enough money to enjoy yourself?
While you’re sure to have questions and concerns, there are steps you can take up front to prepare your finances for divorce. Here’s what you need to do:
- Make a checklist of assets and debts: Doing this allows you to better understand your financial position. It also prepares you for discussions regarding property and debt division.
- Create a new budget: Your family budget will no longer suit your needs. You need a new budget based on your income and expenses. The sooner you create this, the sooner you can make important financial decisions, such as where you’ll live.
- Collect all the necessary documentation: You’ll need many types of documents during the divorce process, including but not limited to bank account statements, retirement account statements, loan statements, credit card statements, tax returns and pay stubs.
- Open individual accounts: Along with closing joint accounts, such as credit cards, open individual accounts. This allows you to keep your finances separate from your soon-to-be ex-spouse, which is important to your financial health. If you continue to use joint accounts, such as to pay individual bills, you’re causing more trouble for yourself.
- Get professional help: You don’t have to go through the divorce process alone, as there are professionals who can answer your questions and provide guidance. For example, a tax professional can explain how retirement assets can impact your finances now and in the future. Even though you’ll pay for professional guidance, it’s best to do so up front, as it can save you a lot of time and money in the future.
The more time you put into preparing your finances for divorce, the better off you’ll be as the process begins and after it comes to an end.
While there’s no way of knowing what will happen during the divorce process, it’s critical to prepare for everything. This will help you protect your legal rights, which is sure to give you peace of mind.