It won’t be long after deciding to divorce that you begin to ponder the impact on your finances.
The way you prepare your finances for divorce can be the difference between success and failure. If you take the right steps, you’ll feel confident in your ability to avoid mistakes and reduce tension. But if you go down the wrong path, you could run into one issue after the next.
Here are five ways to prepare your finances for divorce:
- Take inventory of your assets: By creating a property division checklist, you’ll have a clear idea of the assets you own with your spouse and the assets you brought into the marriage.
- Make a list of your joint debt: Do you have joint credit card debt? How about a mortgage? What about a personal loan or car loan? Some joint debts can be taken care of before the divorce process begins, but others will require your attention as you negotiate with your soon-to-be ex-spouse.
- Create a budget for the future: Once you have a better understanding of how your finances will change after divorce, you can then create a budget that fits your income and lifestyle.
- Open individual accounts: Since you no longer want to commingle funds, it’s critical to open individual accounts. Most commonly, this includes a credit card account, bank accounts and a retirement account.
- Gather all applicable financial records: You’ll need these at various points in the divorce process. Start with pay stubs, tax returns, bank account statements, retirement account statements and life insurance policies. Even if you don’t think you’ll need something, it’s better to collect it up front than to have to search for it later on.
These are just a few of the many ways you can prepare your finances for divorce. While there’s no one-size-fits-all solution to your preparation, these details will give you peace of mind as you move toward a very difficult time of your life.
The way you manage your finances before, during and after divorce is critical to living your best life in the future. Regardless of the financial challenges you face along the way, there’s always an answer.
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