If you are on our website, and reading this article, then chances are you’re already thinking about the idea of a divorce. I know it can be an emotional and stressful time. Unfortunately, that’s usually when our thinking is the cloudiest. We can have trouble understanding simple concepts or wrapping our head around everyday problems. So relax, take a deep breath, and think about these 4 simple things to help you financially prepare for a divorce.
This might seem obvious, but make sure you have access to some money. That can mean a credit card in your name only, a separate bank account in your name, or even a stash of cash in a shoebox or safety deposit box. Some couples function just fine working from joint accounts during their divorce, but I’ve also seen vindictive spouses empty joint accounts as soon as divorce is mentioned. You don’t want to be left without access to funds to pay for divorce professionals or to move into a place of your own. Be smart and take the necessary precautions.
In order to be prepared for the settlement discussions to come, gather all the financial documents you can get your hands on. I’m talking about bank statements, retirement and investment account statements, mortgage statements, paystubs, tax returns, insurance policies, credit card statements, and anything else that seems important. Having copies of all this not only helps you stay informed about your financial situation but will save you money when you meet with a divorce professional and already have an organized file of your financial life.
It can be easy to get so wrapped up in the details of the present that you forget about the future. Don’t. Stop and take some time to think about your life after your divorce. In particular the financial side. Where do you want to live? What are your expenses going to be like? I recommend you put together a budget outlining all your expected living expenses. This will give you some clarity about what you’ll need moving forward and will lessen some of the anxiety about the future.
Finally, think about the costs associated with a divorce. If you think it’s going to be a battle for every asset and advantage, then attorneys will be involved and $20,000 or more will evaporate from your bank accounts. If you envision a more amicable process then perhaps mediation is in your future. It will allow the two of you to talk through the issues and agree between yourselves what works best, saving a lot of money in the process. In either case, you may want a financial professional to be part of your team. They can help remove any confusion about your financial situation, present options for the division of your assets, and provide a picture of how a given settlement will impact your financial future 20 years out.
A divorce is probably the largest financial transaction most people will undertake during their lifetime so make sure you are fully informed. These 4 simple things will get you started on the right track and help make the difficult process of a divorce go more smoothly.
Best of luck.
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