Getting divorced requires that you evaluate your financial situation before, during, and after the process to make sure you will be self-sufficient when everything is completed. Depending on the outcome, you might find that your lifestyle will change dramatically, and if that’s the case, it’s best to prepare yourself ahead of time for the coming changes. Here are six ways that you can ensure you have a solid financial plan:
Start a savings account as soon as possible
You might find that after a divorce you have less disposable income than you once had, or perhaps you don’t have a safety cushion of savings in case of emergency. No matter the details, it’s best to start your own savings account for those unknown circumstances.
Open a credit card in your name
Many couples tend to open lines of credit together, and once you are divorced, you will need to establish your own credit score separate from your spouse. If you can tell that a divorce is on the horizon, it might be a good idea to open a card now to begin building your credit history.
Pull your credit report
While it’s a good habit to get into anyway, pulling your credit report will alert you to any accounts that you might not be aware of. If you and your spouse had debt that you didn’t know of and then you get divorced, you could have a liability on your plate that you weren’t planning on.
Create a new budget
Your financial landscape will look different after a divorce, so prepare yourself for your new reality. If you are transitioning from a two income household, you can’t assume that your expenses will be half as much and your income will cover it all. Take some time to sit down and consider everything from housing to health insurance.
Reevaluate your estate plan
If you and your spouse had an estate plan in place, it will be time to adjust it once your divorce is finalized. It also might be worth thinking about your retirement contributions and long-term investments, as your future needs may change.
Wait before making any large purchases
A divorce is usually emotional and many times people aren’t thinking clearly. It is best to wait before making any major financial decisions, including buying a new car or moving. Unless there is an absolute need such as escaping a dangerous household or a hostile environment for you children, let things settle down before you take on extra spending.
Is a divorce headed your way and you want to prepare for the upcoming changes? Contact Annette Sanchez Law to begin planning for your new life!
