Tips to Help Establish Financial Security After Divorce

October 26, 2012

A divorce marks more than just the end of a relationship; it also represents the end of a financial partnership. As a result, it is important to take a step back from the emotional side of the divorce and review the financial side both during and after the divorce proceeding.

Before a divorce is finalized, it is wise to attempt to develop a post-divorce budget. This will help you to determine what assets you need when determining marital property division in the divorce.

After the divorce is complete, take a moment to look over your new expenses and income. Review your retirement portfolio and investments and make sure that any other long-term goals are taken care of. This could include saving for college if you have children or for a new home.

Whatever your financial goals may be, it is important to keep in mind that proper planning can help to make those goals a reality.

Steps to Better Protect Your Financial Future

In divorce, there are a number of financial matters that need to be reviewed. Financial experts with Forbes Magazine recommend that individuals going through a divorce look over the following:
-Their financial accounts
-Their budgets
-Their credit scores

It is very important to make sure all accounts are updated. If your name changes, make sure all accounts are in your new name. This includes making sure utility, credit card and other bills are updated so that you can continue to make payments on time, as well as the more monotonous process of updating documents like your driver's license, Social Security card and passport.

Also take the time to double check the beneficiaries listed on your insurance, retirement and estate plans. Often, couples list their significant other as the beneficiary on these documents. This designation does not generally change with the issuance of a divorce decree. Instead, many companies require the filing of separate forms to complete the change. Taking the time to do this can ensure that these benefits are given to the person you want to receive them.

Once those first steps are taken, it is a good idea to refine your financial plan. Adjusting your budget to reflect your new income and expenses is an important component of future financial security. A divorce can lead to new financial expenses, like rent or child support payments. Take the time to adjust your budget to reflect these changes.

If you have debt, develop a plan to pay it off. If the debt is the result of multiple credit cards, it may be advantageous to consolidate the payments. Paying off this debt will help to build your credit score.

If you do not have credit card debt, it can be wise to use your credit card to help build your credit score as an individual. Use the card regularly, but pay it off on time every month.

While working to build your credit score, banking experts recommend also reviewing your credit history to make sure your name is not tied to any loans that are no longer your responsibility.

Divorce is a stressful experience. Taking the time to review finances can help to provide a sense of security post-divorce. If you or a loved one is going through a divorce, it is wise to seek the counsel of an experienced family law attorney to better ensure that all circumstances are considered and that the final asset division determination is fair.

Article provided by Law Offices of Corrie A. Boulay, LLC
Visit us at http://www.md-familylawyers.com