In addition to the emotional effects of divorce, most people also experience a financial upheaval. Division of assets, child support, and alimony can all have a significant impact on your financial status. And many couples find that these issues are often the most challenging to navigate.
Taking steps to financially prepare yourself for divorce offers reassurance that you can make it through the process fully intact. Here are a few important steps to take as you work through financial issues with your former spouse.
Set up your own bank accounts
Many couples have joint banking accounts for convenience. If this is the case for you, establish your own account and immediately begin placing funds into it. For instance, you can have your paycheck directly deposited into your new account to establish financial independence from your ex-spouse.
Tighten up your budget
Proper budgeting leading into divorce ensures you have the finances necessary to cover legal costs and other expenses. It also primes you to establish a strong financial foundation when you set out on your own. Try to pay down any high-interest credit to boost your credit score. Also, make sure you’re paying your bills on time, as that will affect your credit score as well. Limit unnecessary expenses for the time being and divert the extra money towards divorce costs.
Research costs for living on your own
Transitioning from a two-income household to a one-income household is definitely an adjustment. That is why you must understand exactly how much you can afford when it comes to living expenses. Take your current income and deduct debt. From there, think about whether you can cover the cost of a mortgage, utilities, and other costs on your own. If you are not able to, consider downsizing your living situation to accommodate your finances.