Filing for Divorce? Financial Steps to Take Before You Do
by Donna Cates, CDFA®, CRPC®
As the new year begins, many of us think about making positive changes in our lives with the saying "new year, new you" in mind. Some women may be thinking about big changes, like getting a divorce.
Even though thinking about divorce can be tough, it's important to think about money too.
Here are some important things to think about before deciding to get a divorce:
Know What You Own: The first thing to do is to understand what things you and your spouse own together. This includes things like money in the bank, houses, investments, and retirement accounts. Make a list of everything you own and owe money on. Knowing about your money is important, especially during a divorce.
Look at Your Credit Report: Your credit report can tell you a lot about your money situation. Get a copy of your credit report to see if you have any shared accounts or credit cards. It will also show your individual credit score. Finding any mistakes or accounts you don't know about is important because they can affect your money after the divorce.
Get Your Own Credit: If you don't have your own credit, now is the time to start. You can get a credit card or a small loan to build your credit. Having good credit is important for your money independence after the divorce. It lets you buy things, rent, or buy a home, and get loans on your own.
Think About Future Expenses: Divorce can change where you live and how much money you need. Make a realistic plan for how much you might spend on things like rent or a mortgage, utilities, groceries, transportation, and personal things. This plan will help you know what you need after the divorce.
Collect Your Money Papers: Start gathering all your important money papers. This includes tax papers, bank statements, loan papers, investment papers, and insurance papers. Having these papers ready will make things easier and make sure you have all the information you need for legal and money advice.
Get Advice from Experts: It's a good idea to talk to a Financial Advisor who knows about divorce. They can give you advice based on your money situation and help you understand the money parts of divorce. You might also want to talk to a lawyer to find out your rights and responsibilities. I can also connect you with other people who can help you get ready for the divorce.
Plan for the Future: Think about what you want to do with your money in the long run. This includes plans for when you retire, investments, money for your children, and planning for what happens after you're gone. Divorce might change these plans, so it's important to think about them and make changes if needed.
Take Care of Your Feelings: Remember that divorce is not just about money and the law. It's also about your feelings. It's okay to ask for support from friends, family, or a therapist. Taking care of your feelings is just as important as taking care of your money.
Deciding to get a divorce is hard, but being ready with your money can make it easier. Use the new year to think about your situation, know about your money, and take charge of your future. Remember, it's not just about ending one part of your life: it's also about starting a new one with confidence and understanding. If you want help, you can talk to me, and I can make this first step a little easier.
This content was generated with AI assistance. While we strive for accuracy, AI may not capture all current laws and market conditions. This information is for informational purposes only and should not be considered personalized financial advice. Always consult a licensed financial advisor for decisions tailored to your unique situation and goals. AI is used to enhance insights, not replace professional guidance.