Divorce can be an ugly business. It causes emotional turmoil that can result in depression, confusion and an entire rollercoaster of other feelings. A divorce may also cause your finances to take a hit. This is why starting to prepare can be so important when you are heading for divorce.
As a result of your divorce, you will have to start over. Even if alimony is part of your divorce, you may still have to manage your expenses with a lower income. However, you can take steps to protect your finances.
Gather up all financial documents
One of the main aspects of your divorce settlement is marital property division. This includes bank accounts, retirement accounts, investment portfolios and anything else you and your husband acquired during your marriage. In order to ensure that you receive a fair share, it is important that you gather all the financial documents that relate to the marital property. If you are not sure where to begin, look over your most current and prior year tax returns. These can help you put together a list of financial institutions that are either a source of income or a source of debt.
Start setting aside funds
A divorce costs money, which is why you may need to start setting aside a “divorce fund” as soon as possible. You may need these funds to pay for your attorney, a financial advisor, and possibly a therapist or any other professional that can aid in your divorce.
Open separate accounts
If you do not already have your own separate bank account or credit card, it may be time open these accounts. You will need to create your own financial identity separate from your husband’s if you intend to make any large purchases in the future. For example, if you plan to take out a car loan or apply for home mortgage, you will need your own credit history.
If you are considering divorce, these are some of the preparations you may find helpful. By taking proactive measures, you can have a foundation to start your new life.