Divorce may be a legal process, but you know it involves much more than the law. Of course, it impacts you emotionally, too. But getting a divorce also affects your finances. If you are not careful, splitting up can send you into financial ruin.
It is essential to take some steps to maintain as much financial stability as possible. While every divorce is unique, here are some suggestions on how to make the process less impactful on your finances.
Take stock of all assets
You should have an understanding of all money, property and debt. Start by gathering the following documents:
- Bank account statements
- Investment account statements
- Retirement plan statements
- Pay stubs
- Income tax returns
- Mortgage loans
- Auto loans
- Personal loans
- Credit card statements
- List of marital assets and debts
This is necessary for several reasons. For one, it gives you an idea of where you are at financially and what you can afford. Additionally, you must use all these documents to make decisions about property division and support payments.
Be careful with your spending
Avoid making major financial decisions or spending more than usual until you speak with an experienced attorney.
As soon as you know ending your marriage is likely, start tracking your expenses and creating a budget. As you track everything, include these items:
- Household bills
- Home maintenance
- Child care
Compare this spending with your recent bank and credit card statements. Next, use all of this information to estimate future expenses, especially when you are living on your own. You should develop a budget with all of these details and stick to it as closely as possible.
Avoid unnecessary conflict
Even though you may be feeling angry and sad, the more you lash out at your spouse, the more expensive your divorce is likely to be. When divorce is a hard-fought battle, you usually end up paying for it significantly.