Divorce can be devastating, both emotionally and financially. It’s a delicate time that can easily result in making poor decisions. These decisions can have an impact on your finances for a long period of time. Making wise decisions can shorten the time it takes to recover financially.
Fortunately, many of the things that need to be done after a divorce don’t require a lot of thought. Some choices are easy to make.
Follow these strategies to get your finances in order after divorce:
1. Open your own bank account and close any joint accounts. If you’re getting divorced, you don’t want to be stuck with any financial liabilities your soon-to-be ex creates. This doesn’t just include bank accounts. Any credit cards are also potential nightmares. Contact your bank and credit card companies and explain the situation.
- Open new accounts in just your name. This might be easier to do before closing the joint accounts. Ensure that you’ll have access to money throughout the divorce process.
2. Consider your housing situation. This can be greatly complicated by the presence of children. Otherwise, it’s often easier to sell the home and move on. When children are part of the picture, it’s often best to consult with an attorney to examine your options.
3. Be aware of all your assets. Do you know the full extent of your financial holdings during your marriage? In many cases, one spouse handles the financial matters, and the other is happy to stay out of it. Now is the time to dig in and develop an accurate picture of what you have. You might be surprised by what you discover.
- Now you have to collectively decide how to handle the assets. Do you split them? Sell them and split the proceeds? Or hire a lawyer and battle it out?
4. Take a look at all your insurance needs. You might need to get on your own medical insurance plan. What items do you still own that need to be insured? Your insurance costs might be much less now. There’s no reason to carry more insurance than you need.
- Your situation has changed, so your insurance needs have likely changed as well.
5. Create a new budget. You income and expenses have changed, so it only makes sense that your budget will change too. If you’ve gone from a two-income household to a single income, there’s likely less margin for error. Create a budget that makes sense for your new circumstances.
6. Change beneficiaries on your life insurance and retirement accounts. There’s a good chance that your beneficiary was your spouse. You’ll probably want to list new beneficiaries. For most accounts, this is easily accomplished by filling out a simple form. This step is often overlooked.
- Ensure that, in the event of your death, your assets go to those whom you want to have them.
7. Get a copy of your credit report. It’s important to know where you stand financially. It’s just as important to be aware of all of your accounts. Your spouse may have opened a joint account or credit card without your knowledge. The better your credit, the easier it is to move through the world.
Divorce is a difficult time for all. But a divorce can be especially difficult if financial matters are not handled intelligently. Focusing your attention on housing, debt, income, and assets will make the transition easier.
These tips highlight the basics. In many instances, an attorney will be required. But understanding the basic issues will make it easier to make wise decisions. Apply these strategies to your circumstances and get the professional guidance you require.