Financial planning for divorcing couples
During a divorce, spouses must switch to budgeting for two households instead of one, making it likely that both parties will need to cut back.
March 26, 2013
Financial planning for divorcing couplesArticle provided by Law Offices of Keith J. Nedwick, P.C.
Visit us at http://www.nedwicklaw.com/
One of the most difficult aspects of a divorce is money. Couples, who were just making it financially together, now need to find a way to support two households on the same income. In a divorce, it is likely that both parties will need to cut back. Child development experts advise divorcing couples to maintain their children's lifestyles during the divorce process, but this may be impossible when there just isn't enough money to go around.
Prepare an accurate budget
The most important thing a divorcing couple can do is to have an accurate budget. This budget should document not only personal monthly expenses, but also expenses that are spent specifically on the children. To know how much you spend a month, experts recommend reviewing at least 12 months of bank and credit card statements. Create a chart or find one online that breaks down the expenses for both parties and the children into categories such as food, transportation, utilities and entertainment. Once you have reviewed the bank statements and created a categorized chart, what your family spends money on will become clear. At this point, it is easier to imagine your likely expenses as a single parent and also to see what expenses aren't necessary and can be cut.
Gather financial records
In addition to reviewing the bank and credit card statements, you are also going to need to start making copies of all the financial records. Again, organization is key, and experts recommend that divorcing couples make a chart that lists the bank or creditor's name, account numbers, name(s) on the accounts, balances, monthly payments and type of investment. Having these financial records on hand will greatly decrease the time and expense of the divorce process.
Obtain a credit report
A credit report will provide you with a list of any open liabilities that you or your spouse may have and also it will also help indicate whether or not you will qualify for a loan in your name alone.
Inventory your personal property
You should take an inventory of all of your personal property. Make a list of what property was acquired before the marriage and what was acquired after the marriage. Generally, most states consider any property that was yours before the marriage to be separate property and it will not be divided in the divorce process.
Talk to an experienced divorce attorney
Talk to an experienced divorce attorney in your area to learn more about the financial aspects of the divorce process. A divorce is never easy. But a divorce attorney will provide you with the knowledge necessary to prevent surprises and keep your finances on track.