Sometimes, divorce is the best option for you. Maybe your spouse was unfaithful, or you simply no longer get along or have anything in common. The process is tough and can be filled with emotional dangers. Of course, it can also be filled with financial danger for those who are not adequately prepared. Money always tends to complicate matters and unknotting the finances of a couple that is getting divorced can be troublesome. Therefore, it is a good idea for people to start preparing their finances as far ahead of time as possible. You will want to keep all of the following tips and financial steps in mind.
Not All Advice Is Good Advice
First, you have to realize that when you are getting a divorce, everybody and their plumber will have advice for you about different aspects of your divorce. This includes your finances. However, not everyone knows or understands your situation. They don’t know your finances, and there is a good chance they don’t know the law in your state.
Don’t listen to your aunt who is telling you that you need to hide some of your money, or your brother that’s telling you to invest all of the money or spend it on things you can hide and sell later. That type of advice is likely to land you in a world of trouble.
To be honest, the best thing you should do when you are contemplating a divorce is to talk with an attorney in Arizona. Ask them what financial steps you can take, as well as what you can and can’t do with your money when you are thinking about divorce, when you file, and during the process.
Keep Track of Your Expenses
When you know that divorce is coming, you should start to keep better track of your expenses and the expenses of the household. Doing so now will give you a better idea of how you need to budget once you are divorced. It can inform where you live, what you drive, and how much you spend each week.
Make sure to include all of your expenses, large and small, when you are tracking. This can give you an accurate idea of how much is being spent. You can then project how much you are likely to spend in the future. Of course, certain factors could change. For example, after you are divorced, you might move into a smaller place that has a lower rent.
Get All of the Documents You Need Together
You should have copies of all of your financial records. This information will give you a good idea of your overall finances. It can take some time to get all of these documents together, so the sooner you start, the better.
Some of the records and documents you will want to have include checking and savings account statements, retirement account statements, investment account statements, all of your loan information, credit card statements, recent pay stubs, royalty payments, income tax returns, and a list of assets, both separate and community.
All of the documents should be easy to obtain. When you are going through an amicable divorce, you will find that your spouse is willing to provide you with the info and documentation that will be needed.
However, adversarial divorces happen, as well. In those cases, one spouse might try to keep information from the other. They might not release documents unless they are forced to do so by the court. You need to do whatever is necessary through legal means to ensure that information is provided.
The best thing to do is to try to keep all aspects of the divorce as transparent as possible with your spouse.
Don’t Make Major Financial Decisions When Leading Up to a Divorce
You don’t want to make any major financial changes or decisions in your life at this point. It’s generally a better idea to hold off on making large purchases or trying to get a loan, even if they are in your name. Wait until the divorce is finalized before moving forward with these financial steps. You want to be sure that you are financially capable of paying for a loan, for example, before you get one.
Take Care with Spending
You will want to try to separate your income as soon as possible. Once you file for divorce, it becomes your separate property rather than community property. However, you don’t want to spend a lot of money when you are leading up to or going through your divorce.
At this point, you should be saving more than you are spending. Don’t splurge on things that aren’t necessary very often. Keep saving and be conservative with your money. You can always buy things later when you are back to being more financially stable.
A lot of people are going to move out of the home they share with their spouse when they are getting divorced. This is a good idea, but it is an added expense. You will have to find a place to live of your own. It tends to be a good idea to get something small during your divorce, so you can save more money. Don’t try to get into another large home, and don’t attempt to stay in the marital home. It’s likely going to be far too expensive for just you.
Open Credit Cards in Your Name
If you don’t have any credit cards that are just in your name, now is the time to open up one or two. This will ensure that you can keep a good credit score or start to build your score if you are trying to get yours to improve.
However, just because you have credit cards doesn’t mean you should spend a lot on them. They should be used for emergencies and for small purchases that you can pay off within the month. This will help to boost your score and ensure you aren’t reliant on cards to survive. Having those cards available to use, though, will be some peace of mind for you just in case you need them. Hopefully, these financial steps will help guide you to success after your divorce, but if you need additional help, you can always look into a Certified Divorce Financial Analyst to assist.