Divorce can impact many parts of your life, from family to feelings and finances. Divorce can affect your income, assets, and credit. Before you file for divorce, check out the five tips below to get your finances in order.
Check Your Financial Standing
Before you file for divorce, take stock of all your financial holdings. Check what is in your name, both names, or the names of any beneficiaries. It is also a good idea to get a credit check.
Look at your income, which may vary from month to month or be fixed, depending on whether you are an hourly salaried employee. Next, check the status of any 401(k) or retirement funds and discuss how the divorce could affect them.
Assess your stock options at this time. Stock can be used as a safety net or an asset in any proceedings.
After analyzing all of the positive incoming finances from the items above, list all bills that you have as an independent and jointly with the household; this creates a new budget.
Adjust Your Budget After Divorce
Before filing for divorce, analyze and adjust your budget. It should include personal and family expenses such as your mortgage, food, electricity, gas, and taxes. Also, include expenses like cable and entertainment. Make any adjustments based on your needs as an individual. You may want to cancel any unneeded expenses.
At this time, you should analyze any expenses that will come after the split, such as a new residence, new transportation, furniture, and added living expenses.
Decide on Assets
Before filing for divorce, you should make a list of your assets and their values. These assets should include any homes, recreational homes, and vehicles. Along with each asset, list the item’s amount, including interest for any loans. For current loans, include the loan’s length and the name on the loan. This step may prompt you to discuss any assets and whether to sell and split any money obtained from the sale.
Move Joint Accounts to Separate Accounts
The majority of married couples have either a joint savings or checking account or both. You may need to set up separate accounts and move any direct deposits to those accounts. Next, you may need to move any withdrawals from the joint account, then close the account. This process might take a few weeks to ensure that the direct deposits and withdraws are routed to the new accounts.
Have a Financial Safety Net After Divorce
Divorce can cause a financial strain, so it’s a good idea to have a safety net. A financial safety net gives you security in the future in case of court and lawyer fees, paperwork fees, unforeseen moving expenses, and living expenses. If you set up a separate account, consider a savings account, perhaps at a different bank, and fund it with even a small amount from each paycheck. Making it an individual account or bank will make you less tempted to use it, and as the money grows, it will be more secure.
Divorce can cause an emotional and financial strain on a person. Many people overlook finances when filing for divorce, but following the steps above may help make the transition smoother. If you have questions about divorce or are ready to file and need representation, contact the Law Offices of Paul Bowen.