Going through a divorce is tough. From the division of assets and worrying about children, to the emotional toll that separation takes on an individual, untangling two people’s lives is bound to come with some messiness. Unfortunately, one of those inevitable burdens is your finances. Even in the most amicable of divorces, separating finances is an unpleasant, yet unavoidable part of the process. However, there are ways to make the proceedings a bit more smooth and straightforward.
Here are five tips for navigating your finances during a divorce.
1. Focus on finances
When dealing with the financial aspect of a divorce, focus on the finances. Talk to a financial advisor for a second opinion. Leave anything unrelated to finance in your lawyer’s office. This may seem like an obvious one, but for some people going through a divorce, the “rip the bandaid off” method is the most appealing. It might be tempting to try and deal with every aspect of your divorce at once, but focusing on one thing at a time will likely simplify proceedings in the long run and help you to cross things off your to do list in a more organized and sensical fashion.
2. Close any joint accounts you have
Avoid doing damage to your credit scores and credit reports by closing any joint credit accounts you have as soon as you can. Continuing to rack up joint debt could complicate the divorce process further. Don’t forget to close any joint checking and savings accounts as well, and open solo bank accounts in their places.
3. Track your finances and create a budget
Now that you have your own bank accounts, begin carefully tracking your expenses, including any divorce expenses. Going from a two income household to a single income household, there is bound to be an adjustment period. Having a budget will help you stay on top of your finances and help you adapt to your new normal. Tracking your expenses will also be helpful for your lawyer when it comes to divvying up any debts or assets.
4. Update your records
Be sure to update any bills in your name, your insurance, tax records, and property titles. Don’t forget about any wills you may have, powers of attorney, beneficiaries on life insurance or retirement accounts, etc.
5. Consult professionals
It may be temping during an emotional time to confide in anyone who will listen, however, due to the personal nature, as well as the legality of the divorce process, it is advisable to consult professionals and keep the details to yourself.
At The Humphreys Group, we are experienced in guiding clients through transition. From teaching recently divorced clients the fundamentals of managing their finances, to our comprehensive and accessible long-term sustainability analysis, we are prepared to assist in any way we can. By listening to your hopes and concerns and taking the time to gain a thorough understanding of your financial situation and your goals for the future, we are able to craft strategies and solutions that are both appropriate and effective. Get in touch with The Humphreys Group today for a second opinion.