The divorce process is complicated. Not only are you dealing with the ending of your relationship, but countless practical things must be considered and decided as well.
While you may be focused on property division and creating a fair parenting time schedule, don’t forget about your finances. The following are some tips to help you financially prepare for divorce.
Assess your financial situation
Before initiating divorce proceedings, gather all your financial documents. Understanding your assets, liabilities and expenses will provide clarity during negotiations. You should also gather information and documents on shared accounts since this may arise during the property division process.
Open accounts in your name only
Open credit cards and bank accounts in your name only. This can help you separate your finances from your spouse’s. Just avoid big purchases without first seeking guidance, as you don’t want to be accused of dissipating marital assets.
Manage your expenses and create a budget
Create a budget outlining your essential post-divorce expenses, such as housing, utilities, insurance and child support. Cut down on discretionary spending to build a financial cushion for the transition period.
Evaluate your income and ability to earn more
Determine your current income and assess your earning potential. Consider updating your skills or pursuing additional education to enhance your career prospects and financial stability if necessary.
Protect your credit
Take time to keep track of your credit report. Check it regularly to ensure there is no unauthorized activity in your name. Close joint accounts and remove your spouse as an authorized user to prevent adverse impacts on your credit score.
Financial preparation is paramount when navigating the complexities of divorce. By taking proactive steps to assess your financial situation, establish independence and plan for the future, you can more effectively avoid financial hardship after a divorce.