In a divorce, you’re moving from married to single, from a partnership to someone who must make decisions on their own. Many of those decisions will be financial.
It might have been years since you handled money. Your spouse might have controlled the checkbook and had the inside knowledge about the money – even if you earned half of it. So if you’re wading through the finances on your own during a divorce, here are some tips.
- Learn where you stand. Chart your income and expenses. Figure out the possible scenarios moving forward, such as if you want to keep living in your family home. Will you be able to afford it?
- Aspire to hold on to “real” assets – not “emotional” ones. The second home where you and your family spent so many wonderful vacations holds great memories, but it needs a lot of work and is just another expense you might not be able to bear. Instead, realize it’s best to let go of the emotional assets and hold on to the ones that will help you make money, such as stocks.
- Take your time making big decisions. Now isn’t the time for big purchases or selling off assets. In fact, if you want to do the latter, consult with your attorney first. That could be marital property and part of a divorce settlement – and something that isn’t yours alone to sell.
- Handle your retirement accounts the right way. Your attorney can work with you to split retirement accounts properly to maintain tax benefits.
- Predict your future finances. Remember that the joint costs in a single household are turning into your own costs in a solo household. It all adds up – rent or mortgage, insurance, transportation, etc. Be realistic in your numbers as it will help the court to figure how much alimony and child support you might receive – or pay.
- Don’t forget the kids’ expenses. Who will cover medical insurance? Who will pay for day care? When they’re older, who will pay for the sports fees, the art classes, the high school yearbook and the prom dress? Figuring out these things now will save disputes down the road.
Divorce is difficult, emotional and a financial upheaval. Your financial adviser and your divorce attorney both are there to help.