How to ready your finances for divorce
Your life changes the second you decide to divorce. Even if you feel that it’s in your best interest, you can’t help but think about the impact it will have on your personal life and finances in the future.
There are many steps you can take to ready your finances for divorce, all of which deserve your attention as soon as you can get around to focusing on them. Here are four places to start:
- Create an asset and debt division checklist: This is a list of all your assets and debts, categorized as accurately as possible, to ensure that nothing gets overlooked in your divorce. It’s also the right place to make note of any assets or debts that should not be subject to division.
- Create a budget: Your new budget should take into consideration the fact that you now only have one income. It’s common to find that you need to take steps to cut your expenses. The sooner you create a budget, the sooner you can stabilize your finances and set goals for the future.
- Collect all applicable documentation: This will vary from one divorce to the next, but typically includes tax return documents, bank statements, retirement account statements and pay stubs. Even if you don’t think you’ll need something, keep it nearby as you move through your divorce.
- Close joint accounts: If you have joint accounts with your soon to be ex-spouse, now’s the time to review them in detail and decide what to do next. For example, if you have joint credit card accounts with balances, talk to the other person about paying them off. By closing accounts, you eliminate the possibility of the other person using it for their gain.
When you take these steps, it’s easier to feel good about your financial circumstances as you head into the divorce process. As long as you’re willing to negotiate and compromise in good faith, things will come together as you discuss the details of your divorce in mediation.
Divorce will alter your financial circumstances in many ways, but once you know what you’re dealing with you can make decisions for a better future.