Divorce is, without a doubt, an expensive prospect. Median costs in the United States for a divorce is around $7,000 – and the average is somewhere between $15,000 and $20,000.
Many of the divorce expenses are actually related to things you may not be thinking about right away, like how you are going to afford the downpayment on a new condo or the security deposit on a new apartment, or what it will cost to refinance your car into only your name. You may also have to buy new furniture, kitchen goods and more – and that can all get expensive, very fast.
So, how do you plan ahead when divorce is inevitable? Here are some tips:
- Get your own bank account and credit card.
If you only have a shared bank account and shared credit cards with your spouse, it’s time to start establishing financial boundaries and building your own credit. Open your own account and have your income directly deposited. You can then transfer money to the shared account for shared expenses.
Then, open a credit card solely in your name. You should use it, but sparingly. That will help you build an independent credit history and allow you to track your spending.
- Gather your financial records and start going through them.
Your financial records are key to establishing the marital assets and debts, which has a big impact on what you receive when the property is divided. Gather up:
- Your checking and savings accounts
- Retirement account records for you and your spouse
- Investment account statements for the past two years
- Credit card statements for at least the past year
- Pay stubs and records of any bonuses paid to your and your spouse
- Income tax returns for the past two years
- Copies of deeds or titles to any real estate, cars or recreational vehicles and boats
- Go over your usual monthly expenses and anticipate future ones.
You don’t know what it will take to financially survive on your own until you understand what money you’re spending today and what your spending will look like in the future.
You need to start investigating what it will cost to replace your housing and furnishings, what it will cost you to refinance any real property into your own name and how your retirement or investments will be affected in the future.
At any age, divorce is a complicated undertaking, and financial issues are a huge part of that. Make sure you have experienced legal guidance by your side.