Not knowing what to expect, you may view the financial aspects of your upcoming divorce with a certain amount of trepidation.
Replace that anxiety with a feeling of accomplishment. Here are four tips to help you prepare your finances for divorce and the new life that awaits.
Track your expenses
Your divorce attorney will need a listing of your household income and expenses. However, you will also find this information valuable when setting up your post-divorce budget. Include how much you pay for food, clothing, entertainment, transportation, childcare, home maintenance and any other common expenses.
Pull financial information together
This is an effort that will likely take a while, but the information is essential for the divorce process. Here are some items to look for:
- Bank account statements for the past year
- Income tax returns for the past three years
- Retirement account statements
- Credit card statements
- Recent pay stubs
- List of both separate and marital assets and debts
- Loan documents, such as mortgage, auto loans and personal loans
Avoid big financial decisions
Major financial changes will happen as part of the divorce process. In the meantime, refrain from making decisions such as changing the beneficiaries in your life insurance policy and retirement accounts.
Spend and save conservatively
Some couples refrain from using certain accounts, such as credit card accounts, altogether as they face the property division phase of their divorce. However, if you continue to use your accounts, do not go on a shopping spree. Spend conservatively. This is another good exercise to help you budget wisely as you enter the next phase of your life.