On a scale of one to 10, how good are you with money? Do you consider yourself a financial guru who sees far into the future and is confident that you're set for life? Perhaps you're more like those who can't recall the last time they looked at a pay stub or balanced a checkbook. Do people even do that anymore?
Maybe you're somewhere in between. You do your best to make ends meet, save a little when you can and at least have some funds set aside in case of emergency. You may also be the type of person who has been married 10 or more years and basically left all finance-related matters up to your spouse. That may have seemed like it was working well, until you decided to divorce. If you hope to avoid financial distress post-divorce, there are several things you should know.
Consider your sources carefully
Your friends and family, perhaps even co-workers or people you're only mildly acquainted to, might hit you with all sorts of financial advice as you head into divorce proceedings. The following ideas may help you avoid disaster:
- Don't take financial advice from just anyone. If you have an accountant on hand, he or she can provide effective financial guidance, but your friend's sister's husband who has no legal or financial background may not be the best source of support.
- If you have all your money locked up in jointly owned accounts, you may want to open separate accounts right away.
- The same goes for your credit card accounts. After petitioning the court for divorce, the last thing you need is for your spouse to incur added debt on your credit card balances.
- Even if you've never been much of a record-keeper, now is a good time to start because the more organized your financial documents are, the easier it will be to navigate property division proceedings.
- You undoubtedly wish to keep your credit score as high as possible, which may be problematic if you have different names on different accounts. Decide if you will revert to your maiden name, and if so, promptly change all pertinent documents and accounts.
If you take some time to establish your own line of credit, update your estate plan or execute one if you don't currently have one in place, as well as take a careful inventory of all your assets and liabilities, you will be well-informed and prepared to negotiate a final settlement.
Beyond the settlement
As you move on in life, and especially if you have children and they will be living with you, you will be in charge of your finances. This is why it's critical to know where to seek support, if a post-divorce, finance-related legal problem arises.