The financial component of the divorce can be very complex and can cause a lot of conflicts and misinterpretation. The longer you have been married and the more assets you have acquired together the harder it is to make a “clear and fair cut” that serves justice to both the sides.
This is also an area in which many people made a lot of mistakes while dealing with their own divorce. There’s some good news for you because you can learn a lot from them and make sure not to make those same mistakes again.
To simplify the process of dealing with financial aspects of your divorce we will divide it in 3 stages and offer you practical strategies how to make the best out of this difficult situation in your life.
Pre-divorce financial advice
First thing to do is to separate your bank accounts, if possible talk about this step with your soon to be ex-partner. Take the money you have and bring it to another bank, also make sure that you are the only one who has access to your credit cards.
Second thing- document everything. Make sure that you have photocopies of all the household expenses for the previous twelve months including utility bills, property taxes, repairs, improvements made to your household and all the association fees.
Obtain copies of all of the bank records for the previous months along with the real estate transaction during the entire duration of the marriage. Credit card statements for all open and closed accounts can be a great source of information and even your travel tickets are valuable indicators of your past and current financial status.
You will need all this documentation to provide a clear picture of income, expenses and investments made through your marriage in order to facilitate a better division of “the financial cake” in your divorce.
During divorce financial advice
This is likely going to be the most emotionally challenging period for you so get support from anyone who is close to you and ideally went through a divorce or a similar situation. If you are in an emotional mess and you decide to isolate such a circumstance will indeed influence the financial decisions you are going to make during your divorce.
How to manage financial issues during divorce?
Keep a list of questions regarding your finances that are concerning your divorce. Note down any questions that you have and ask your lawyer, financial advisor or any other professional advisor you are working with. Keep in mind that experts that you hired to help you out through your divorce need to be people that you choose consciously and carefully. People who you feel comfortable with, individuals who you trust, professionals who are competent and efficient in answering your questions. Make sure they are answering in a relevant and timely manner.
Questions you might be dealing with in this stage on your divorce are likely connected to:
1. Current financial concerns- what will be the financial impact of the divorce? What will be the overall expenses? How am I doing financially now? Where will I find more money if I need it?
2. Your family home– what is going to happen to it? Will it be sold? What will be my financial consequences of moving out and living elsewhere? What if I stay in my current home, will I be able to maintain it with my current income? What are my options on the long-term?
3. Savings and pension money acquired during the marriage- what happens with this money? What is the best way to reach a fair financial settlement around savings and pension? Which solution would work for me and be respectful of my ex-partner?
If you are having difficulties affording a lawyer, try applying for legal aid if available. Often for people whose income is below a threshold there is a state funded legal board. This may support you in getting the help you need without the trouble of having to lend money from your relatives and going in debt.
Post divorce financial advice
When the divorce process is over you can finally look forward to bringing prosperity into your life again. Your life as a single person will be different than the one you had while you were married and so will be your financial situation.
There are 3 basic financial advice that can support you in your life after divorce.
1. Continue keeping track of your finances- what is not measured can’t be managed, so make sure to keep your habit of having clarity over your income and expenses. When you become good at this you will be able to predict your future financial figures.
2. Indulge in what you love and cut fearlessly on what you don’t find important – this will teach you to enjoy your life while living within your means.
3. Return your debt and start saving- is a decent financial advice relevant to anyone looking for a good quality of life, but for people who went through divorce it comes with a sense of “urgency”.
If nothing else your divorce likely gave you an opportunity to look closely into your financial situation and now you can continue planning out your life with more clarity and therefore better control over your finances.
Be accountable, responsible and proactive and you will make the best out of your financial situation affected by divorce.