You’ve decided to divorce and have come to realize that it will impact your finances in a variety of ways. While you could sit back and hope for the best, doing so could lead you down the wrong path.
Your best strategy is preparing your finances for the divorce process as far in advance as possible. By doing so, you’ll never be caught off guard or find yourself making a rash decision without the proper knowledge guiding it.
Here are five tips you can follow:
- Gather all necessary financial records: While this differs from one person to the next, it typically includes bank account statements, retirement account statements, mortgage statements, credit card statements, pay stubs and benefits information.
- Create a property and debt division checklist: This is designed with the idea of outlining all your assets and debts, thus ensuring that they’re discussed during your divorce. A property division checklist can also prevent your ex from hiding assets from the court.
- Create a new budget: The budget you followed during your marriage is no longer applicable to your situation. Create a new budget based on your personal income and expenses.
- Review your credit report and score: This is important, as you may find yourself making big financial decisions post-divorce, such as buying a car or home. It’s also a good time to pinpoint any mistakes on your credit report that could be harming your score.
- Open accounts in your name: Now’s the time to close all joint accounts, such as bank accounts and credit cards you previously shared with your ex. Open new accounts in your name so that you have full control over your finances. Doing so once you decide to divorce can help avoid a situation in which you comingle assets.
Following these five tips will help you best prepare your finances for the divorce process.
It’s the decisions you make before and during your divorce that will impact your financial security in the near future and over the long haul. Understanding your legal rights and protecting them will help eliminate many of your financial questions, while also preparing you for success once your marriage is finally in the past.