No two divorces are the same. Some are messy, while others can be relatively clean. Whether you split with your ex on good terms or bad, there are a few aspects of your life you should review to ensure you come out of the divorce in the best way possible. Today, we look at six financial steps you should consider during the divorce process.
1) Review your credit report
Pull your credit reports early in the divorce process from the three main credit bureaus. Review the information to make sure all your information is correct.
2) Review your bank accounts
If you and your partner have a joint bank account, you’ll both likely want to open new individual accounts. You should take this step early in the divorce process because it’s usually easier to get an individual account if you are still listed as “married”. Also, your interest rate will likely be lower if you apply for a bank account after your divorce is final. Once you and your partner have opened separate accounts, close the joint accounts. This will also help asset division during court proceedings as a judge may view this process as the time in which both parties agreed to end “joint responsibility” for their finances.
3) Amend your will or estate plans
Make any changes to the beneficiaries of your will or estate during the divorce. Oftentimes a person has their spouse or members of their spouse’s family in their will. Amend your will to make sure those people have your best interests at heart.
4) Review your budget
Depending on your financial situation during your marriage, most people will need to create a new budget following a divorce. Make sure you plan ahead for unexpected legal fees, and consider allocating funds for a new apartment if you’re moving out. Divorce can be an expensive process, so make sure you consider both the short and long-term implications for your budget.
5) Limit your credit card use
A divorce can be a good time to review your spending patterns, especially when it comes to swiping plastic. The biggest reason to limit your credit card use is because you don’t need any added stress in your life. Divorce can be a complicated process, and there’s no need to add to the stress by racking up a huge bill and hoping the credit card company gets its payment on time. Remember, you’ll be in the process of closing and opening bank accounts, and some credit cards may have auto-payments linked to those accounts. There’s no need to get hit with a late payment fee and interest charges on a big bill because you spent a lot on your Visa last month.
6) Utilize professional resources
There are plenty of resources that can help you manage your finances during and after a divorce. Tax professionals can help you understand how divorce may impact your credit, or how to file your taxes after a divorce. Also, take advantage of money management programs or apps. These programs can help you develop a new budget and highlight where you could be saving money.
Related source: About.com