The divorce process is closing in and you have major concerns about what will come next in regard to your finances. While you don't have total control over the divorce process, as your soon-to-be ex-spouse will have a say, there are steps you can take to prepare your finances and protect your interests along the way.
Here are five things you can do to prepare your finances for divorce:
- Make a list of your assets and debts: Not only does this give you a clear overview of your finances, but it also helps prevent a situation in which the other individual hides a valuable asset from the court.
- Create a new budget: As you review your current budget, consider the changes you'll make in the future once you're on your own. For example, you may be taking one car while your ex takes the other, meaning you're now only responsible for one payment.
- Reduce your expenses: With a budget in place, it's clear to see if you'll earn enough money to comfortably pay for all your expenses. Even if you will, cutting your expenses post-divorce can give you financial peace of mind.
- Collect documentation: The right documentation will help you prepare for the divorce process. Furthermore, the court typically requires it. Start with retirement account statements, bank account statements, credit card statements, loan statements, recent pay stubs and recent tax returns.
- Close all joint accounts: This is the right time to close joint accounts, such as credit cards, as you don't want to give the other individual the opportunity to use them. For example, if you have a joint credit card, talk to the other person about using savings to pay the balance in full and then closing the account. Getting this off your plate before your divorce can save you time and stress down the road.