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Wise Money Choices While Contemplating Divorce

Be Smart About Finances in Divorce!

Tips for Finances in Divorce from Lakeshore Law and Mediation of Spring Lake MISome marriages are just unhappy. Days of bickering and cold shoulders pile one on top of the next. For some, marriage counseling can offer a new perspective. For others, divorce may be the fresh start they have been seeking.

If you have decided to file for divorce, or you have been shocked by being “served” with divorce papers, you will need to make wise choices as you navigate finances in divorce.

 

7 Points of Financial Wisdom During Divorce

1. Prepare a Budget.  If you have never lived by a budget before, NOW, is the time to sit down and consciously become aware of your monthly bills. There are many online tools to help you prepare a budget, or your attorney can provide you with a schedule of expenses (including recurring and non-recurring expenses).

Since you will incur attorney fees, it is important for you to project the cost to include in your budget as well. Ask direct questions of your attorney as to “how much your divorce will or may cost?”

2. Prepare an Asset and Debt Spreadsheet.  Do you know your financial standing? It is amazing how many people are unaware of their exact financial outlook. Many couples have one person who handles all of the finances while the other person just contributes a paycheck and remains “in the dark” about bottom line.

When faced with divorce, financial knowledge is a MUST. There have been cases where a spouse is totally blind-sided by credit card debt, lack of IRS tax payments, or other financial debacles that significantly affect them for the rest of their lives.

3. Be Aware of your Emotions. In a stressful situation, like divorce, it is difficult to make wise, thoughtfully considered decisions. People who “just give up” or “fight to the death” often regret their decisions later on. “Buyers remorse” is common once the divorce settlement’s ink has dried.

An attorney can help you gain perspective on your financial decisions. It is important to separate emotional reactions from financial results. Your decisions now will  affect you in the long term.

4. Your Children. Children will adjust to the new living situation so long as they are not used as pawns by either one of you to gain either and emotional or financial advantage. Children are the innocent third parties in any divorce. Do not share “adult” topics with them. Assure them that both you and your spouse will always love them. Leave your children out of the controversy. If you need help with this aspect of divorce, seek counseling for yourself.

5. A New “Friend”. While it may be exciting to move on from the old “ball and chain,” having a new love interest may drain your pocket book when you can least afford the luxury.

Also, spending marital money on a new love may alter the final financial outcome of the divorce,  if you are using “marital money” for the benefit of a third party. Watch your step in this arena.

6. Begin Separation of your Accounts. You must be aware of any court orders regarding “dissipation of marital assets.” However, once temporary orders have been established, it is important for you to set up separate accounts, both checking, savings, and credit cards where appropriate.

7. Credit Reports. If you are a person who never checks your own credit report, now is the time to start. My annual credit report allows for you to receive all three major credit reports once per year at no charge. You don’t have to pay extra for your “credit score.” Just get your reports and become familiar with the content of each report. If you need help understanding what they mean, ask your attorney.

 

If you need personal financial advice for your divorce, Lakeshore Law and Mediation is here to help! Simply give us a call at 616.844.4091