Finances are one of the biggest concerns for those going through a divorce. Setting up your finances before or during a divorce can be daunting. These tips will help you get started.
While no one ever intends to end their marriage in divorce, the reality is that it occurs far more often than any of us want to think about. If you are facing a divorce, it's important to take some time to prepare yourself financially. This may mean setting aside money, finding new bank accounts, or figuring out your debt situation. The goal is to make sure that you have as much control over your finances as possible during this difficult time. We hope this blog post provides some helpful tips on how to do just that – and hopefully, you’ll have one less thing to worry about as you face this unprecedented moment in your life.
Do Your Divorce Financial Planning In Advance
When a long-term marriage ends in divorce, there is often a period of time ranging from two to five months prior to the final decision to end the marriage where you can plan ahead for what’s to come. Putting some of your money away during that period will help you get a head start so that you feel less overwhelmed later.
You should also obtain copies of all the bills and account statements, even if you have not been the one handling the funds up until this point. You will have a better understanding of your current financial condition and what to anticipate throughout the divorce process as a result of reading this. This will also provide you with the ability to create a budget so that you can get ready for the divorce. Not sure how to do that? Check out Divide & Thrive's digital divorce planner.
This is an important step in divorce financial planning. You need to know where you stand financially so that you can make the best decisions for your future. The last thing you need at this stage is to be hit by additional curveballs!
Have A Separate Savings Or Checking Account
Both parties' assets are considered common property in divorce; so, putting aside a little amount of money ahead of time may give you the budget you need to prepare for the divorce. Don’t have your own bank account? Then, the time has arrived to open one. Stuffing your mattress or storing cash in a shoebox simply isn’t going to cut it – and you don’t want to continue sharing an account with your soon-to-be-ex.
For your own peace of mind, you need some financial independence during divorce proceedings. Consider transferring any joint accounts into your name only. This way, you will not have to worry about your ex-spouse using or withdrawing funds without your knowledge. It is also critical to carefully monitor all to keep track and to ensure that you are not overspending. It can also be helpful to set up a budget so that you can better track your expenses.
During a divorce, finances might become difficult. You may not have anticipated all of the additional costs that have arisen, and there are often far more than you are expecting! If you maintain track of your finances, you will be able to better manage your money and avoid any unpleasant financial surprises.
Consider A High-Yield Savings Account
While you’re opening a new account, you might as well do your future self a massive favor and pick a high-interest savings account that will maximize your returns. These accounts offer much faster balance growth, and when it comes time to file for divorce, you'll have greater financial flexibility as a result of this. When you have more money to work with, even something as difficult as a divorce can become significantly less stressful. And as a bonus, you'll be able to achieve your financial objectives faster.
However, there are a few things to keep in mind when you're setting up a high-yield savings account. First, make sure to shop around and compare interest rates so that you can find the best deal. Second, remember to deposit money into your account on a regular basis. The more often you contribute, the more quickly your savings will grow. Finally, don't be afraid to use your savings if you need to – and if you’re going through a divorce, you will definitely need to! Just make sure to replenish it as soon as possible so that you're always prepared for the future.
Figure Out Your Debt Situation
If you are facing a divorce, it is important to understand your debt situation so you can make the best decisions for your future. This can be a difficult task, as you will need to look through years of financial records. However, it is important to have a clear understanding of your debt before you begin divorce proceedings.
One way to get an accurate picture of your debt is to request a credit report with a detailed history of your credit use to help you identify any areas of concern. You should also gather all of your financial records, including tax returns, bank statements, and credit card bills. This will allow you to get a complete picture of your financial situation.
If the situation is worse than you imagined it would be, you should consider consulting with a financial planner or attorney to figure out what options are available to you. Regrettably, you will probably need to have a conversation with your ex as well, which you may not necessarily feel like doing.
But with a little bit of planning, you can get your debt under control and begin to rebuild your credit. A professional will be able to best advise you on the options available, but you may be able to negotiate with your creditors to lower your payments or interest rates. This can help you get your debt under control and make it more manageable. You may also be able to consolidate your debts into one monthly payment. This can help you save money on interest and make your payments more affordable.
Divorce is never easy, but it is important to remember that you are not alone. There are many resources available to help you through this difficult time – and our Divide & Thrive Divorce Planner is just one of them.
The tips listed in this article should also help you get started on the right foot. With a little preparation, you can divorce with your finances intact!