In addition to determining custody, support and property, you need to consider your financial future while undergoing divorce. Transitioning from two incomes and one set of expenses to one income and double costs requires planning.
Your post-divorce financial future should play a role in dealing with negotiations over property division. While deciding on ownership of your house, for example, you should consider whether you can qualify for refinancing and pay for its upkeep and taxes.
Information is power. Gather documents going back three to five years. These include:
- Statements for bank and credit card accounts.
- Loan documents.
- Real estate papers.
- Listing of personal property.
- Stocks and bonds.
- Tax returns.
You may be liable for any purchase or debts accrued on joint bank or credit card accounts by your soon-to-be former spouse. Close all of your joint accounts and open new accounts in your name. This will also help improve your post-marriage credit.
Any named beneficiaries on life insurance policies and pension and retirement accounts are entitled to their assets if you die. After your divorce, take the time to review and change your named beneficiaries on these assets. If you want to make these changes before your divorce is final, you should first discuss this with your attorney.
Consider the assets and income you need to keep your current or adjusted standard of living. Divorce may also require downsizing and cutting back on expenses such as shopping, vacations, streaming services and dining out.
You should also think about going back to work. Consider starting an emergency fund and start saving for future expenses such as a mortgage or your children’s college expenses.
When creating a budget, take these steps:
- List all major and minor expenses, including utility bills, medical costs, food, home repairs and even your children’s extracurricular fees.
- Add up these costs.
- List any income from work or investments.
- Do not include any income that is not guaranteed, such as tax refunds, gifts or bonuses, which may be used to pay debts instead.
- Subtract expenses from income.
Determine whether you must obtain health insurance if you were covered by your spouse’s policy. Insurance coverage can be included in the divorce settlement. Employers may also provide coverage because divorce is usually considered a life change, permitting enrollment outside the usual period.
Attorneys may provide options and negotiate an agreement that addresses your financial future needs. They can assist you with seeking a fair and reasonable decree.