Getting divorced is a stressful and draining experience for most people, especially when it comes to finances. This is particularly true for couples who divorce later in life, something which is becoming increasingly more common. Along with this, divorce can have a massive financial impact – figures show that after divorce, the average household income tends to go down by around 25% for men, and a huge 40% for women. Along with this, managing finances after divorce can also be difficult – retirement becomes more expensive when you’re on your own, and even day-to-day living costs can increase. Those who work part-time or were reliant on their partner’s income throughout the marriage may also see themselves having to go back to full-time work in order to support themselves financially after a divorce. Because of this, during the divorce process is the best time to make sure that you have all of your personal finances in order. We’ve put together some of the main financial must-dos for getting divorced.
Plan Ahead
Planning ahead, not only for the financial implications of the actual divorce process itself such as legal fees, but also for your own finances during and after the divorce is absolutely essential. Having a good idea of how much money you have access to, for example your wages, savings, and even using an alimony calculator to determine how much you can expect from your ex-spouse in order to help with living costs or the cost of childcare can help you to stay in control and ensure that your finances are in order, which will make it much easier for you once all of the divorce proceedings are finalized.
Keep Records
One of the most important things that you will need to do regarding your finances when going through a divorce is keep records. Document everything, for example how much money you receive and spend every month, how much you are spending of any money that you get from your ex-spouse, and other financial documents such as tax records, loan applications, statements, property ownership, car registrations, and insurance policies. This will enable you to quickly have financial evidence to show in court if needed, and can make the whole process of dividing finances and assets between yourself and your ex-spouse a much easier one.
Know What is Owed
Between couples who are getting divorced, hidden debts are more common than you may realize. In states which have community property laws, spouses who are divorcing tend to be held responsible for half of their spouse’s debt, even if the debt itself is only in their name. Even if you don’t live in a state which has community property laws, it’s still important to ensure that you know exactly how much you and your spouse owe and who to, as it’s still likely that you will be held responsible for half of any debts that are owed jointly between you and your spouse, even if you have not personally benefitted from the credit line. For example, if your spouse is paying monthly for a car which you never drive but both names are on the ownership, you could still be held responsible for making half of the repayments.
Track Legal Fees
Legal fees during a divorce can often add up. When you hire a divorce lawyer or attorney who will represent you during your case, it’s vital to ensure that you know exactly how much you are going to have to pay them for their service. Sticking to a budget when finding a divorce attorney is essential in order to make sure that you don’t end up spending more than you can afford on the legal side of things. Along with that, make sure that you keep a close eye on anything that your legal representation is spending on your behalf, and be mindful that they will be billing you at an hourly rate, therefore it’s vital to stay in control of how much time you spend with your lawyer.
Do Get Your Fair Share
Last but not least, making sure that you get your fair share when you divorce your spouse is essential. Remember that in most cases, you will be entitled to half of everything that you owned together as a married couple, and you should take all of it – even if you end up with things that you don’t want, they can be sold on, for example, in order to benefit you financially.
Getting divorced can be a costly process, which is why it’s vital to take control of your finances from the beginning.
