What Do I Need to Do to Prepare My Finances for Divorce
Few events in a person’s life can be as financially stressful as a divorce. Not only does divorce mean emotionally separating yourself from a person you may have shared your life with for years, but dividing assets and debts can put extra stress on you and your soon-to-be former spouse. Preparing your finances before the divorce even begins can help smooth the process and ease stress.
Your first step should be to gather all of the financial records that you can. These records include bank statements, credit card statements, and statements concerning investments and retirements accounts. These records should also include other financial obligations such as a copy of your mortgage, or installment contracts such as a vehicle note. In conjunction with gathering the documents, you will want to take stock of your assets. Getting these documents together and knowing a rough estimate of your assets will help provide an accurate picture of the size of the marital estate and what needs to be divided.
Your next step will be to create a new budget. Divorce means having to restructure your finances in the short term and the long term. Your new budget needs to reflect the fact that you will no longer have two incomes to help share bills and unexpected expenses, or that there will be one income to support two households. If you are the custodial parent to the minor children, you will almost certainly be receiving child support. Receiving spousal support is a less reliable prospect and your new budget should take that uncertainty into account. You need to understand your necessary expenses and you may need to make cuts to those expenses while you restructure your finances during the divorce.
Thirdly, you may need to open up new and separate financial accounts. This includes not only a checking and savings account, but also a credit card in your sole name. Responsibly using a credit card can help to build your credit history, which can make getting a new apartment, home, or vehicle much simpler in the future. You will also want to start to carefully monitor your credit rating. Even after the divorce is over, you may still be tied to your former spouse on certain debts. Monitoring your credit rating before, during, and after the divorce will help you know when you need to take steps to protect yourself.
The financial aspects of divorce are nuanced and you need an experienced attorney to help you. Contact us today at 619-800-0384 if you are facing divorce or separation, and we can help talk to you about how to financially prepare for your divorce