How to Prepare Your Finances For a Divorce

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A divorce is often an extremely stressful, time-consuming, and painful experience. It may even be the hardest thing that you will ever have to do in your life. Nevertheless, there are a lot of things you can do to make it at least a little bit easier, and one of the best ways to do that is by preparing your finances beforehand.

It is no secret that a divorce can be financially debilitating, any divorce lawyer can tell you that much. Even if you’re in a good financial position before the divorce, there’s no guarantee that your finances will stay in the same shape afterward. And if you’re already in a sticky spot with your finances, a divorce can be just the thing that drains you.

With that in mind, here are several ways you can prepare your finances before starting the divorce process:

1. Talk to a financial advisor

Doing so can help you prepare your finances for the cost of the divorce as well as the expenses after it is done. Even if you are the financial planner in your marriage, it helps to have a professional look over your finances and guide you in making the best decisions to prepare for the complexities that a divorce will inevitably bring. It’s best to speak to a financial advisor before filing for a divorce, but if you already have, find one as soon as possible.

2. Consult your attorney

When you’re just about to divorce, you may be tempted to transfer money, change bank accounts, or make other moves to ‘safeguard’ your finances. However, keep in mind that any move you make with your finances may not hold up well in court. So, if you are unsure about what’s okay and what’s not okay, consult with your attorney first. In fact, consult with your attorney before doing anything drastic with your personal life that could affect your divorce.

3. Take inventory

Figure out what you have, including investments, savings, equity, and other financial assets. In this way, you know where you stand financially, and can thus better plan our expenses during and after the divorce.

4. Anticipate future expenses

Divorce costs vary on a case-to-case basis, but your attorney may be able to give you a ballpark figure of what to expect.

Aside from the cost of the divorce itself, factor in your future expenses without your spouse, including spousal or child support that you might have to pay. If you were a double-income household, you have to anticipate the bills and expenses that you would have to pay alone after the divorce is finalized. This may be more difficult if you are keeping the house and will have the majority of custodial time, but it’s better to anticipate than get caught off guard with future expenses.

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5. Start tracking your expenses

As soon as your divorce starts or even before that, start tracking your household expenses. The main benefit of doing this is that it helps the judge decide how to split assets and debts between you and your spouse. Apart from that, it also makes you create a budget for your life after the divorce is over.

6. Cut costs

Now is not the time to start spending money on unnecessary stuff, no matter how tempting it might be to placate your feelings through shopping or taking lavish vacations. Save as much money as you can before and after the divorce starts. While there is nothing wrong with treating yourself once in a while, do so at a minimum, and as much as possible, reserve the large unnecessary expenses for after the divorce is over.

7. Gather paperwork

Land titles, lease contracts, debt documents, receipts–gather every relevant financial document that you can find and make copies. Doing this in advance makes it easier to sort out the nitty-gritty details later, and will also help your lawyer do their job better. Moreover, gathering paperwork before the divorce reduces the risk of confrontation from a not-so-amicable spouse

8. Talk to your spouse

The best way you can both get out of this with your finances relatively unscathed is to work together. For many couples, this is easier said than done, but when emotions finally start to die down, try having a conversation about how to handle the finances in the best way possible.

Divorce affects almost every aspect of your life, but one of the areas that suffer the most impact is your finances. With these strategies, however, you can better prepare your finances for what’s to come, which may not be as easy as you might think.

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