6 Financial Steps to Take After a Divorce
Following a divorce, you may find yourself confused about the financial decisions you now face. For instance, you may be paying or receiving child support or alimony payments. Or maybe you have to seek new or better employment to pay for the basic expenses your former spouse’s income covered.
Are you taking the first steps toward financial freedom following a divorce? Are you unsure of how to move forward? These steps will help you move forward in post-marriage life.
1. Separate Your Finances
After your divorce, it is smart to remove your name and information from joint bank and credit accounts. You should open new accounts under your name.
At this time, you might also want to remove your ex-spouse from other accounts, including your life insurance and health insurance if necessary. You might also want to make changes to your legal documents, like your medical directives, power of attorney, and living will.
Of course, you will find some exceptions to this rule. You cannot clear your accounts without your partner knowing, and you may not remove your name from accounts if a judge has specifically ordered you not to. Additionally, some ex-spouses like to keep a central account together to cover children’s expenses.
2. Take Care of All Financial Documents
You should keep your financial records where you can easily access them while you settle financial issues with your ex-spouse. Documents you should hold onto include checking and savings account statements, retirement paperwork, investment account data, and loan information. Also, hold on to credit card statements, pay stubs, and former tax returns.
3. Check Your Credit
You should monitor your credit regularly regardless of your marital status, but this step is especially crucial after divorce. Your credit report will show how severing your finances from your ex-spouse affected your credit. You can then working strengthening your credit or maintaining your already good credit score.
On your credit report, you might also find outstanding debts on your report that were settled in the divorce and no longer apply to you. If you notice these items, contact the lender or debt collector to dispute the charges.
4. Establish a New Budget
Post-divorce is a great time to sit down and think about your expenses. How much money do you need to make, at a minimum, so you can pay for all your monthly expenses? Come up with accurate figures that are realistic for you and your new life.
Creating a new budget is especially important when you have new expenses and types of payments. For example, you might need to account for child support or alimony, or you may have moved in the course of your divorce, leaving you alone responsible for utility bills and housing costs. Without proper planning, these new budgetary additions can become a burden.
5. Avoid Making Big Decisions
Wait for a while before you make major life changes. For instance, you might want to wait and see how your new finances work out before you commit to purchasing a home. You might make an exception if you are trying to buy the home in which you and your ex-spouse had been living. In this case, you need to work on getting your ex-spouse’s name off the mortgage once you are legally able to.
6. Work With a Divorce Attorney
Working with a divorce attorney during and after your divorce is a fantastic way to think smarter, not harder about the financial impact of divorce. Divorce lawyers can ensure that you make financial decisions that are not legally or financially dangerous during or after your divorce.
Work with the Law Offices of Lynda Latta, LLC, as you go through and move on from divorce. Remember to discuss your finances with your attorney so you can feel financial stable after your divorce is finalized.