Managing your money is challenging at the best of times. During a divorce, you’re hit with extra legal fees and unplanned aspects. Making matters worse, your access to various accounts may be limited, and every action you take is subject to scrutiny. All of this happens while you’re struggling with the emotional upheaval of divorce. Here are a few tips on how to deal with the financial aspects of divorce.
Follow the Right Advice
Don’t start following unsolicited advice. The horror story of your coworker’s divorce may not provide accurate information of what to do in your case. Talk to your divorce attorney and other professionals as needed. Then, only follow their advice.
This is especially true with regard to your finances. Draw up a budget for how you’ll live post-divorce, and talk to a financial planner. This allows you to have the hard facts on how much money you need, and this information is necessary to demand the right level of child support and alimony. You don’t want to make the mistake of demanding assets without having the ability to pay for them.
Focus on Your Finances
It is easy to fight over who gets what, but the big picture requires focusing on your financial future. Close your joint accounts, and open new accounts. This is critical for jointly held credit cards and other forms of debt, since you are equally liable for any debt the other person racks up during this time.
Set up your own checking account so that you have full control over your finances. You can get money quickly by selling property you own. For example, you can sell a ring quickly and easily. Then you have the money to write checks or pay bills while the joint account is being settled. Get things like the utility bills in one name or the other. These are first steps to establishing your own credit.
Make decisions on whether to keep or sell the car based on what will fit your budget long term. This process is made easier when you can say the financial planner says it is necessary. Then you’re only fighting over visitation with the children.
Update Your Records
Update beneficiary information on everything as soon as you can. Change your marital status for tax purposes. Update the titles on the home and car. Secure your own health insurance, so you don’t have to pay for their healthcare or remain dependent on their good graces.
Keep Good Financial Records
You need to keep good financial records. First, it helps you determine whether or not your initial budget is accurate. If you need more financial support or really can’t afford that car payment, you want to resolve the issue while going through the divorce rather than trying to amend an agreement later. Secondly, tracking how you’re spending the money can help you justify the existing requests for alimony or child support. Periodically evaluate your accounts so you know where you are and can plan how to work toward your desired future.
While divorce is disruptive and managing your own finances can be frightening, follow these steps to get a handle on your finances and family situation. With the right help, plan, and people on your side, you’ll be able to get through this.