Dealing With Money Before and After Divorce: 5 Essential Questions

Dealing with Money After Divorce

No matter who you are or what your current life situation happens to be, going through a divorce is guaranteed to change your financial situation. Legal fees, moving costs, redistributed assets, childcare costs, and other financial considerations can all have a big impact on your sense of financial security. What’s more, if your partner was responsible for handling finances during your marriage, you may feel overwhelmed when faced with the prospect of suddenly managing finances on your own.

The good news is that with careful planning, it’s more than possible to take control of your finances. To get you started, here are five essential questions to ask yourself when dealing with money before and after your divorce.

1. Do I Have Funds Set Aside in My Own Name?

If you’ve recently begun the divorce process, then the first question you’ll want to ask yourself is whether or not you have any bank accounts or credit cards in your own name. Many couples own joint accounts, which are convenient during a marriage but can lead to disaster in the event of a hostile divorce. Close any joint accounts as soon as possible, and transfer funds to an account in your own name. This way, a potentially hostile ex-partner will have less opportunity to cut you off from your finances.

2. Do I Know What My Assets are Worth?

Another step to take at the beginning of the divorce process is to determine how much your assets are worth. This typically includes your house, cars, bank accounts, investments, and any other valuable possessions. You’ll also want to inventory any debts that you currently owe.

Once you’ve familiarized yourself with your assets, you’ll want to determine which assets are considered marital property and which are considered non-marital property. Generally speaking, the distinction is that marital property will have been acquired during your marriage. Ultimately, taking the time to understand your assets will give you a financial advantage by ensuring you don’t overlook any important assets during the divorce proceedings.

3. Do I Know What Funds I’m Legally Entitled to Post-Divorce?

Depending on your situation, you may be entitled to funds such as alimony or child support following your divorce. In these situations, it’s wise to consult with a family law attorney, in order to make sure you’re fully aware of all relevant legal details. Although, ideally, your ex-partner will be scrupulous about sending alimony, child support, or other funds, the reality is that funds aren’t always sent in full or on time.

4. Am I Making Financial Decisions Based on Logic or Emotion?

It’s probably not surprising to learn that emotions play a big role in many people’s post-divorce financial decisions. For example, it’s often difficult to make the decision to sell a home or car that may be too expensive to keep after your divorce. Some parents find themselves trying to make it up to their children by purchasing expensive toys, clothes, or other items. Although it’s challenging, being extra careful about avoiding emotional expenses following a divorce will pay off in added financial security.

5. Have I Updated My Budget And Left Room for Unexpected Expenses?

Even if you kept a budget before your divorce, you’ll want to set aside the time to update your budget with new monthly expenses. In particular, you may want to leave room for unexpected expenses, until you’ve become familiar with your new post-divorce lifestyle. If it feels overwhelming to create a budget, remember to start with the basics: food, shelter, childcare, and any other broad categories that come to mind. Once you’ve budgeted for your basic needs, it becomes easier to factor smaller expenses into your budget.

Our online resource has step-by-step instructions for organizing your finances and creating your post-divorce budget. We have personalized support available as well. Getting a clear picture of your post-divorce financial situation can definitely be challenging, but is very do-able with right resources around you. I can guarantee you’ll feel much less anxiety and confusion when you’ve tackled this piece! We’re here to help – you don’t have to go it alone!



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