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How to prepare your finances for divorce

February 28, 2020 | Firm News

Once you decide to divorce, some of your attention should turn to your finances. If you don’t plan for this up front, you could end up regretting your decision once your divorce is finalized.

While no two people are dealing with the exact same circumstances in divorce, here are some steps you can take to prepare your finances:

  • Create an asset and debt division checklist: This is designed to clearly list out all the assets and debts that will come into play during your divorce. Your checklist is also a good place to make note of what are individual and what are joint assets and debts.
  • Review your budget: Your current budget isn’t likely to suit you after divorce, so make the appropriate changes. For example, you’ll no longer have your ex’s salary, so you need to take this into consideration.
  • Make living arrangements: Maybe you want to stay in the family home. Or maybe you’re okay with the idea of giving it to your ex in exchange for other assets. Regardless of the approach you take, make sure you have an idea of where you’ll live in the future.
  • Pay off joint debt: It’s not always possible, but you may be able to work with your soon-to-be ex to eliminate joint debt before the divorce process begins. For instance, if you have joint credit card debt, you can use cash in your savings account to pay it off. This is one less thing you have to concern yourself with in your divorce.
  • Don’t make any big purchases: Even if there are big purchases in your future, such as a motor vehicle, wait until your divorce is in the books before proceeding. You don’t want there to be any gray area in regard to the funds used for the purchase.

When you take these steps, you’ll find yourself feeling better about your financial situation during and after divorce.

Remember this: Your ex is doing the exact same thing, so make decisions with your best interests in mind. It’s up to you to take steps to protect your financial interests and legal rights. Neglecting to do so will result in additional challenges in the future.

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