Divorce can take a significant toll on your finances. You and your spouse usually need to disentangle your accounts and you may find yourself with access to fewer resources. There are several steps you should take to prepare your finances for life after the divorce.
According to Nerd Wallet, courts use financial information to make decisions about child support and alimony. However, you may also need to manage your finances on a smaller income. As soon as you realize that a divorce is in your future, you should begin looking over your finances.
Examine your financial records
Your marital finances consist of more than your checking and savings accounts. You and your spouse may also have joint credit cards, investment accounts and retirement accounts. You should look over all of these. Which accounts will you need to close? Can you access these accounts by yourself or do you need to receive documents from your spouse? Additionally, you should look at the debts that you and your spouse have. Is there anything that you need to pay off before finalizing the divorce? Taking stock of these accounts can help you understand what kinds of financial assets you currently have access to. It can also help you determine which accounts you will need to open in your name after the divorce.
Understand your expenses
As you begin the divorce process, you should take a close look at your income and expenses. How much will you need to make each month to manage these expenses on one salary? Also, you should consider what kind of expenses you may have in the future. Will you need to buy a new car in the next few years? Will your home need new appliances? You should estimate the costs for these purchases so that you can better understand your financial health after the divorce.
Preparing your finances for your post-divorce life may be easier if you and your spouse communicate smoothly during the divorce process.