When you’re feeling the emotional impact of divorce, it can be difficult to pivot your focus to your finances. No one wants to have to think about budgets during a time like this. However, it’s vital to prepare yourself for the financial challenges that might appear in your future. Refusing to deal with it can present more problems for you in the end. That’s why we’ve created a list of financial tips for divorce. This list of expert advice is important for anyone facing significant or even minor changes in their financial life after a divorce.
1. Respectfully Ignore Your Friend’s Financial Tips for Divorce
Let’s face it, divorce is quite common. That means that any friends who have been through a divorce will want to share their story. While it can be helpful to have an empathetic support system, it’s not always helpful when it comes to your finances. Every single person goes through a divorce in a different way. No two divorces are exactly the same. Be sure that you’re only taking financial advice from your divorce lawyer or financial advisor. Following someone else’s lead in this situation could pose major problems in the future.
2. Gather Important Documents
If you and your spouse shared bank accounts, credit cards, assets, or property, it’s important to start gathering all of those documents. These records will help to paint of picture of your financial history and your net income. It can be a long and tiring process to locate and collect these types of document, so it’s recommended to start early. You’ll want to start collecting checking and savings statements, mortgage statements, loans, credit card statements, and tax returns. Having this paperwork ready can help you to feel more organized moving forward.
3. Know Your Past Budget
Anyone dishing out financial tips for divorce will strongly advise you to make a monthly budget of how you lived prior to the divorce. This figure will come in handy when it comes to possibly alimony payments or child support. It’s important to know exactly how much you normally spent on things like food, transportation, clothing, or recreational activities per month.
4. Know Your Future Budget
It’s just as important to be aware of your future budget as it is your past budget. You need to identify any new expenses that could appear after the divorce is finalized. New tax hikes, schools for the children, or a rise in HOA fees could significantly change the way you live. Financial tips for divorce will always include predicting your future budget.
5. Don’t Make Big Purchases
It might be easy to fall into the trap of retail therapy after a divorce. You may be tempted to buy a new car or move into a new condo. However, financial experts deem this a bad idea. Don’t start spending money you don’t have yet. Hold off on big purchases until you have a final hearing.
6. Don’t Commit to Making Important Financial Decisions
It could also be tempting to change your will, remove beneficiaries, or turn your estate planning upside down. Divorce lawyers and financial advisors will advise you to refrain from making these changes. Judges don’t commonly see it as a fair move and you could even lose assets to your ex. It’s best to wait to divide these finances together with your attorneys.
7. Anticipate Resistance from Your Ex
It’s also strongly advised to be ready with supporting arguments, receipts, or other documentation to prove your points. Even amicable divorces can get heated when it comes to separating assets and dividing finances. Be ready to defend yourself.
8. Start Saving
Having a sufficient savings account is always recommended. But saving after a divorce is essential. Until you hear the final judgment from the courts, you don’t know what kind of financial state you’ll be left in. Having a nest egg can help to ease stress and give you some peace of mind.
9. Consider Retirement
Even younger couples that are divorcing should consider their retirement. If you don’t have a retirement plan or pension, but your spouse does, you could be eligible to receive half of that fund. Remember to talk to your divorce lawyer or financial advisor about what kind of paperwork needs to be completed to split retirement funds.
10. Remember to Ask for Help
Of course, don’t ever face financial struggles or questions alone. Remember to ask for help if you’re unsure about certain documents, funds, or taxes. It’s important to follow expert financial tips for divorce. Finances can suddenly turn complicated once a divorce is on the horizon. It’s unnecessary to have to go it alone. An experienced divorce lawyer can give you more information on how to financially prepare for a divorce. They can assist you in estate planning, budgeting, and a number of other financial moves. Contact a divorce lawyer today to learn more about your financial future!