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Managing finances before and through a divorce

On Behalf of | Jun 14, 2024 | Divorce

Divorce may be an extremely challenging time, especially regarding money management. Acting proactively to ensure continuing financial stability is crucial. Understanding your current financial situation helps you plan for the future, securing your financial well-being.

Assessing your financial situation

To begin with, evaluate your current financial state. Collect necessary paperwork, like investment accounts, tax returns, and credit card and bank statements. Planning your divorce will be easier with a clear understanding of your finances. To get a complete picture of the state of your finances, list all your assets and debts.

Budgeting for the future

Divorce typically changes your financial situation. Adjust your budget to reflect these changes. Take note of your earnings, expenses, and any potential post-divorce changes. Make plans for both short-term and long-term objectives. It might include everyday living costs, child support, and housing.

Protecting your credit

Separation could impact your credit score. Carefully manage and close any shared accounts. Keep track of your payments for joint debts to prevent penalty fees and negative credit marks. Regularly monitor your credit to catch issues early. To help untangle your finances and protect your credit, consider: 

  • Open individual bank accounts and credit cards
  • Update beneficiaries on insurance policies and retirement accounts
  • Track all financial transactions related to the divorce
  • Consider freezing your credit score

Planning for a secure future

Divorce is a significant life change, but with careful financial planning, you can successfully go through it. Taking proactive steps will help you move forward with greater confidence and financial security.