Getting a divorce can change your life in many ways. For example, you may experience financial changes that alter your lifestyle following your divorce.
Divorce is a common experience and according to the Centers for Disease Control and Prevention, in the U.S. in 2018, 782,039 divorces and annulments occurred. If you are one of the many preparing for divorce, taking these financial steps beforehand can help you protect your interests.
1. Gather financial records
You will need a clear picture of where you stand financially before your divorce. Compile records of any debts you owe, assets you own, bank account statements, real estate accounts and other financial accounts.
2. Establish a post-divorce budget
Going back to a single-income budget may mean you have to make some financial changes. Write down what your expenses and income will look like after your divorce. Looking over and preparing your budget can also impact how you negotiate your divorce settlement, so it is an important step to take.
3. Close joint accounts
If possible, close all joint accounts you have with your spouse. Then, open up new checking and saving accounts in your name. If you need to establish credit, apply for a new line of credit in your name.
As your divorce gets underway, do not make any sudden financial moves that could affect negotiations. For example, you may want to hold off on buying a new car, moving across the country or taking on major debt that could affect your current and future financial standing.