Nothing about divorce is easy or simple. Chances are you are feeling like your entire life is in utter chaos, from your finances to your family. One of the scariest aspects of ending your marriage is the financial impact. Managing your finances is stressful enough in any situation–divorce just adds more fuel to the stress fire.
You may be worrying about being able to support yourself and whether you will be able to keep your home. While all of these questions may feel overwhelming, you can learn how to secure your financial future. Here are some guidelines to follow when it comes to money and divorce.
1. Gather and make copies of all financial records
Organizing your finances is a crucial step in the divorce process. Document all your assets and debts. Make copies of records and statements from all your accounts, including the following:
- Checking accounts
- Savings accounts
- Tax returns
- Retirement accounts
- Mortgage statements
- Insurance policies
This will not only speed up the property division process, but it will give you a clear idea of your financial health.
2. Monitor your credit
Request your credit report as soon as possible and correct any mistakes on it. Start making improvements to your credit if it is not in good shape. If you do not have any of your own credit, make sure you start establishing it right now. Open your own bank account and credit card to establish your own individual finances. However, be careful not to take on any new debt.
3. Know the consequences of property division
Not every type of property is equal. A retirement account worth $500,000 is not the equivalent of a home with an appraisal of $500,000. Do not agree to any property distribution before talking with an attorney or financial adviser first. You must know the current value, cost basis and tax consequences of keeping or giving up any assets.
