One of the most frightening things about going through a divorce is realizing you will be going from a joint income to a single income household. For many people, the thought of paying all the bills on their own seems next to impossible. And yet, half of all U.S. marriages end in divorce, and all of these people manage to make it on their own.
If you are going through a divorce, you may also be concerned about how you will support yourself. Here are some ideas to help you manage your finances while going through a divorce.
Speak to your spouse about closing or freezing joint bank accounts
If you and your former partner have joint bank accounts, it may be wise to address this issue early in the divorce process. Just like you would not want him or her to empty your joint account, you should not take all the money out of your joint account. Instead, talk to him or her about dividing the money and closing the account. Or if you cannot agree how the money will be divided, you can have your account frozen until you reach a settlement regarding division of the money. Just make sure to document how much money is in the account. If your ex removes money without your permission, you will need some way to prove how much money was in the account.
Open new accounts in your name
You should also consider opening a new bank account solely in your name. This will help protect the money you are making going forward. It will also help you build credit under your name. A good credit score is important when looking for a new place to live or applying for any type of loan.
Start saving money
Maybe you and your soon-to-be ex are still living together. Or maybe he or she has moved out, but you are still splitting the bills at your former home. While you are sharing costs with someone else, start saving as much money as you can. Finances are going to be tighter when you start out on your own. Having a bit of a cushion will help with the transition. Also, any large new purchases you make will likely be considered marital property and will be subject to equitable distribution through the property division process.
Create a budget
If you do not already have a list of your monthly expenses, create a spreadsheet of all your monthly bills like internet, mortgage, utilities, car payment and credit card payment. You will also want include an estimate of expenses like groceries and entertainment. Make sure you have a little extra money built into your budget for emergency expenses like car repairs or home maintenance.
Figuring out your financial obligations will help you decide if you can afford to continue paying the mortgage or keep your car. Selling the house may make more financial sense, or maybe you can cut back on expenses like entertainment or groceries. You can also try shopping for cheaper car insurance or participate in a utility company’s budget plan, so your bill stays the same each month.
Define your new goals
Just because your life is changing does not mean your life is over. Maybe you and your ex talked about moving to New York after he or she got promoted. Or maybe you two planned to retire in Aruba. Though you no longer have a partner, that does not mean you cannot make plans of your own. If you have been thinking about going back to school to change careers, now could be the time to do it. School can be expensive, but you may qualify for federal loans or scholarships. Remember, your new goals no longer need to include anyone else, so you can do the things you always wanted to do, like travelling more or taking up boxing.
Getting divorced is tough on most people’s finances, but if you start preparing now, you can get your money in order before you start your new life after the divorce.