It’s never fun, but sometimes (and unfortunately) it’s necessary.
Going through a divorce is as tough on your finances as it is on your heart. Having said that, while a divorce will certainly alter your marital status, it really doesn’t have to change who you are as a person.
Divorce lawyers in Scottsdale recommend the following four tips to managing your money during a divorce. These tips will help you push your emotions aside and grasp a stronger hold on your life.
Access Your Credit Reports
Once every year, you are able to pull a free credit report from each of the three credit reporting agencies – Equifax, Experian, and TransUnion. The agencies will show each and every credit account that is in your name, regardless of whether it is individually or jointly owned. If your spouse (or ex-spouse) doesn’t pay his/her bills on time, it can negatively impact your credit score. By watching your credit, you are also watching your spouse in many ways.
Work With Your Ex
You should really continue to utilize your individual or jointly-owned accounts as normal. If you come to a point and realize that you don’t have the proper funds to hire a divorce attorney and handle any other relevant expenses, you should come to a mutual decision with your spouse about spending a conservative and equal amount to get what you want. In the case of a relationship that isn’t amicable, consider going through your attorney for legal separation. This would specify how you both should be using your money until the divorce is complete.
Remember Health Insurance
If you were on your spouse’s insurance policy, paying for an entirely new individual policy could cost you a significant amount of money. You really want to take time to examine your insurance policy before your divorce is finalized. Open enrollment for health insurance begins at the end of the year. A change in health insurance resulting from a divorce is considered to be a “qualifying life event.” Thus, you’ll likely be eligible for a plan under a Special Enrollment Period regardless of your offical divorce decree date.
Establish a Financial Plan
Living on less income is certainly no easy task. In order to be financially stable, you need to learn the art of budgeting. You’ll need to consider things like college tuition, sports and activities, child care, lessons, retirement, transportation, taxes, and rent/mortgage payments.
Here’s another thought: if your divorce settlement results in money from property sales, retirement account rollovers, or the sale of other assets, consider using a financial planner to help you create a budget and to properly navigate the taxable implications of such transactions.