Even when it is the best solution for the couple’s future, many people approach the divorce process with a sense of worry and trepidation. For some, the sense of trouble is centered specifically on their financial well-being.
Separating the spending power and financial stability of an established household into two independent futures can be an intimidating prospect. Unfortunately, many individuals immediately start making preparations to protect their own financial strength. While every divorce process is unique, there are certain tactics that are more helpful than others, including:
- Inventory your financial strength: While many of these items will appear during the division of assets and debt responsibilities, it is wise to examine them in advance. Individuals should itemize everything from retirement accounts and savings plans to a stock portfolio and deferred compensation packages.
- Begin separating joint accounts: From a joint checking account to shared credit cards, the divorcing couple should begin paying off debt and separating various accounts from joint to independent. Not only does this indicate your independent financial strength, but it also improves the efficiency of the property division process.
- Do not hide assets: From a secret savings account to cash stashed around the house, it is crucial that you are upfront and honest about finances through the entire process.
- Build a budget for the future: While bills and overall debt are still generally shared, now is the time to carefully examine your own independent finances. It is wise to start making a strict budget for your post-divorce finances. You can end memberships and curtail discretionary spending until your independent finances have stabilized.
It is important to remain calm while focusing on these types of financial matters. Many divorcing individuals find the process overwhelming and face minor panic when looking at the overall financial picture. Follow these tips and the guidance of your chosen legal professional to avoid harm during the divorce process.