What are the best ways to handle my finances during the divorce process?
Divorce is never simple, but taking the time to handle finances during a divorce can make it a little bit easier. The divorce process often leads to both emotional and financial turmoil, therefore it might be difficult to get both spouses on the same page. It is important for both spouses to work together to consolidate shared debts, identify assets, and figure out child support. Doing so allows for a much smoother transition during a divorce.
CLOSE JOINT ACCOUNTS
One important step in figuring out one’s finances is to close the joint accounts shared with a spouse. Doing this is a helpful way to avoid dealing with post-divorce financial liabilities. In a divorce, each spouse is responsible for any shared accounts. In order to avoid dealing with debts after a divorce, both spouses should work together to pay off any shared debts.
IDENTIFY PERSONAL ASSETS
Spouses should also take the time to identify their personal assets in the marriage. Many personal assets include a few bank accounts that are not shared with a spouse. One should examine these accounts and identify their personal asset amount. This helps one to determine how much money they can work with after a separation.
IDENTIFY MARITAL ASSETS
Unlike personal assets, marital assets are shared between both spouses. For example, if the ex-spouse is living in the family home, an agreement might deem them responsible for taking care of the bills. Ex-spouses should decide how to pay each marital asset. It is important for both people to be fair and cordial during this discussion.
MAKE A BUDGET
It can be difficult for many newly single individuals to live a life without two incomes. Therefore, it is important for these people to set up a budget and stick to it. The budget should have the monthly expenses in mind. It is important to keep the budget realistic.
A budget is important, particularly for those who relied on their husband or wife financially during the marriage. It may take one living a less comfortable lifestyle for a while before things feel normal again. However, this is an important step in becoming financially independent.
Ex-spouses should also discuss a budget for the children’s needs. Things to take into consideration for this budget are childcare, clothes, food, healthcare, field trip money, dance recital fees, or anything else that comes to mind. Once this is decided, it is important to stick to it.