Divorce can be a terrifying prospect for many people. What will happen to you after the divorce? Will you be able to support yourself once you split from your husband? What about the house you’ve lived in for the last 15 years in Clinton Township? Will you have to sell it? Can you afford to still live there?
These are just a few of the questions that many people ask themselves when divorce is on the horizon and questions like these often make divorce a scary process. However, with just a little bit of planning and preparation, you can limit the stress and fear that often comes with divorce.
One of the things that you know for sure about your divorce is that your financial situation will change. If you do not begin to take certain preemptive steps before signing the final papers, you could find yourself missing a lot of the money and other assets you originally expected to have to help you start a new life. Here are a few things you can do to financially prepare for your divorce.
Collect your financial records
The very first thing you should after you make the decision to divorce or once it becomes clear that your marriage is over, is to gather as much financial information as you can. If possible, gather five years’ worth of records such as tax returns, pay stubs, bank statements, investment portfolio statements and the titles to any property you and your spouse own. Once you have these, make copies and store them in a safe place where your spouse cannot access them, such as a safety deposit box or with a trusted relative.
Once you have your financial records in order, take an inventory of all the assets you own. This could include your house, cars, furniture, jewelry and anything else the two of you have acquired during the marriage. Make a separate list of the items you owned before your marriage as well as any gifts that were given only to you or any inheritances you have received. These items are generally separate from marital property and should not be a part of the divorce settlement.
Check your credit
To have a complete picture of your financial health, you will also need to check your credit and continue to monitor it during and after your divorce. If something does not look right, you might need to get additional assistance before you approach your spouse for a complete disclosure of financial information.
Open your own accounts
If you and your spouse have joint bank accounts and credit card accounts, it is time that you open accounts that are solely in your name. You may even want to do this with a different bank than the one the two of you have been using. A credit card in your name will allow you to start building a credit history that is completely separate from your husband’s.
In addition to the above tips, you should make a budget and track your expenses. This will help you determine where you have room to make some cuts. Even if you come out of your divorce feeling financially secure, it is still likely that, at some point, you begin to feel the pinch of living in a single-income household. If you are planning to divorce, take action now to start protecting your financial future.