How to Financially Plan for Your Divorce
Depending on the length of litigation, divorce can be an expensive prospect. On average, it costs about as much to get divorced as it does to get married, between $20,000 and $30,000. These expenses can be from legal fees, court costs, and the expenses associated with refinancing or changing deed information. If you’re thinking about divorce, there are some monetary strategies you should take advantage of to save yourself some hassle later. You should sit down with your divorce attorney when looking over and figuring out your financial strategy for your divorce. Take a look at these tips to financially plan for your divorce:
Enlist the Help of a Financial Advisor
People most commonly think of retaining legal counsel to protect their assets, which is always a good idea. However, it can also be beneficial to consider the services of a financial advisor. Recently, an advisor with Ameriprise Financial, told USA Today, “The biggest thing that I see, and a common divorce finance mistake, is waiting too long to replace that partner’s responsibility. Often, finances, especially in times of emotional turmoil, become a back-seat rider. A lot of opportunities are missed and a lot of mistakes made.” One of the biggest upheavals you can expect is dealing with the transition of a joint income to a single one. Particularly if you have children, this adjustment can come as a shock. Know what your monthly bills are so you have an idea of what you need to pay once your partner’s income is gone. It’s also time to start watching your joint bank statements and credit cards if you aren’t doing so already. The more information you have, the easier it’ll be for you to make a smooth financial change.
When it comes to your fiscal situation, it’s important to be prepared. That means knowing what kind of debt the two of you are going to have to split. If you aren’t the one who makes the financial decisions, get as much information about your assets as you can. Hunt for paperwork, retirement information, and documentation of your liabilities.
Get a Copy of Your Credit Report
The items listed on your credit report hold the key to your financial future. If you have no idea what your credit score is, now is the time to find out. Mistakes on your credit report can keep you from getting a lease for a car or a bank loan for a house, which could lead to disastrous consequences in the future. Scan your report for any inconsistencies, and work with your creditors to get them corrected. If you have a delinquent account that’s paid in full, ask your creditors if they’d be willing to remove it from your report. The more spotless your credit, the better you’ll fare after the divorce is over.
Open Your Own Accounts
It’s never too early to open accounts in your own name. Choose credit companies and banks that are different than your joint accounts. Set up checking and savings accounts, and start to accumulate emergency cash into each. You can use this to pay initial legal fees without arousing any suspicion.
If you’re a spouse who gave up work to take care of the home, obtaining a line of credit can be difficult. If you’re having trouble getting approved for a card based on your income, you may want to consider paying a deposit and getting a secured card. Once you make consistent timely payments, most creditors will allow you to increase your credit line.
Planning for a divorce can be a daunting prospect, but if you account for your future financially, you’ll be much better off. If you have any questions or would like to know more about divorce proceedings, contact one of our family lawyers at Prescott Find A Lawyer.
