Beyond being emotionally taxing, a divorce can heavily impact your finances. The freedom it brings comes at a price, which can be particularly steep if you are unprepared. Before dissolving your marriage, consider your readiness to bear the costs of living alone.
Know what you own and owe
A big part of divorce is taking an inventory of your assets. Gather key financial records, such as current and past financial statements, land titles, credit card statements, retirement accounts and household bills.
If your spouse is primarily responsible for handling family finances, conducting a thorough audit becomes more crucial. Doing so may help you stay vigilant against any hidden assets or undisclosed debts that might become your responsibility. Understanding your financial situation before starting divorce proceedings empowers you to make strategic decisions and prepare for the unexpected.
Establish financial independence
If you don’t have bank accounts in your name yet, this may be the time to start. Divorce can drive people to take drastic actions, such as locking up joint bank accounts or rerouting cash. In the face of uncertainty, having your own account gives you a secure place to store emergency funds and protect you from financial manipulation.
Develop your future budget
After a divorce, it is likely that your living expenses and income will change. Setting clear goals can help you avoid financial difficulty after divorce. Review your current household expenses and consider what adjustments you can live with. Make sure to leave room for emergencies.
Divorce-related expenses can escalate to thousands of dollars, not to mention your future living expenses. Seeking the advice of a competent attorney can play a crucial role in avoiding costly mistakes and ensuring the protection of your best interests.