Getting divorced is tough enough, but it can feel even more overwhelming when you start dividing assets and talking about money. What’s the first step to take? How can you protect yourself? What can you do to plan for a better future?
These are questions I asked myself while going through my divorce as 25 years old. Aside from the emotional stress of it all, you have to deal with money too. And that’s never easy.
Here are 4 crucial financial steps to take in order to successfully prepare yourself for a divorce.
Step 1: Get the Details Organized
The first step towards preparing your finances for a split is to get organized, and list out all of the assets and accounts you own.
Create a list of every joint or separate account you have, and put this information in a spreadsheet. List out bank balances, credit cards, loans, and all the details like terms, conditions and whose names are on each account.
This is important information since the debts and assets will have to be divided. It’s also likely that you’ll be asked to share this information during the divorce process, so it’s smart to get everything organized now.
Step 2: Divide Joint Accounts
Once you know which accounts and credit cards belong to each other, it’s time to separate them. When my ex husband and I went through our divorce, we had two joint assets that needed to be divided; our mortgage loan and a joint bank account.
Separating any join assets will protect you both from the whims of the divorce process. In the event the divorce isn’t a civil one, you don’t want to your spouse to clean out your bank accounts or have access to your social security number.
Additionally, you want to protect your credit history if your ex fails to make payments on time. If your names are both on the loans and credit cards, and one of you pays late, or stops paying altogether, the other person is still liable for the debts. So it’s smart to divide all joint accounts right now.
Step 3: Protect Your Future
The next step is to protect yourself and your financial future going forward. Check your credit report to make sure everything is correct. Are there errors, or any mistakes? If so, now’s the time to fix them.
Before signing off on the divorce papers, make sure you ask for what you want. It’s nearly impossible to correct anything, get any assets signed over, or have bank accounts transferred after everything is finalized.
Step 4: Keep a Paper Trail
Going through a divorce, of any kind, is very difficult. There will be days when the process is going smoothly, and there will be times when neither of you can agree on anything. Because of this you should keep a paper trail of all discussions, agreements, and financial decisions.
Put your words in writing, whether it’s through email conversations or text messages. The important thing is to keep written records, and this applies to any debt settlements, loan refinances, debt payoffs and other financial transactions, too.
The best thing you can do when going through a divorce is to protect yourself and your financial future. Stay calm and use these steps to create a well thought out strategy for moving forward.