Amicable or not, untangling two people’s money during a divorce is messy. Get financially prepared for divorce with these five tips.
Two facts show how important finances are to a marriage:
- Financial problems are one of the commonest causes for divorce
- Financial concerns are the most difficult to resolve during divorce
It’s important to know how to financially prepare for a divorce. Many young and new couples dispute this reality. But being ready doesn’t necessarily mean your marriage will end in divorce.
It just means you’re prepared for another possibility.
Prepare Financially for Divorce
Divorce is both financially and emotionally draining. It is easier to address the emotional damage by assuring you’re both on good financially footing.
There’s no doubt you and your partner can agree to divorce and split the property one way or another. But in a marriage where you and your partner have shared assets, it’s likely one of you will think you’re entitled to a larger share when the split occurs.
To avoid such a battle, here are five ways to financially ready yourself for divorce
1. Seek advice or counsel from professionals
Before you decide to share your finances with your partner, get professional advice. Laws vary from state to state. Find a financial lawyer who can outline your rights and describe the process of untangling money in a divorce. You can review Nebraska’s Marital Property Division Laws here.
Consider a prenuptial agreement before you put your finances together.
What’s important is to have all the relevant information. Information is power. Before you entangle your finances, seek professional counsel. It’s important your partner does the same.
2. Know what you spend and where
Keep a record of all the money you spend. This is especially convenient when you realize you and your partner are headed for a divorce.
Money fights are among the most frequent kind of dispute between partners.
Include what you spend on:
- Restaurants & fast food
If you don’t record your expenses and estimate a monthly budget, start now. Again, it’s just a precaution. Even if you and your partner are happy together, it’s a good idea to track expenses.
But if a divorce is necessary, your financial tracking is important because it helps:
- Your attorney fight the case
- The judge choose the partner who deserves support, whether spousal or child
Knowing how much you spend monthly or even weekly will help you build your budget after the divorce is final.
3. Keep your receipts
Always keep your receipts, as useless as they may seem. If you don’t need them for a divorce, use them to estimate your spending and to help you improve financially.
In a divorce, however, the receipts support your description of your and your partner’s spending patterns. Make sure you keep all:
- Bank statements
- Credit card statements
- Saving account transactions
- Checking deposits
- Account withdrawals
Depending on how healthy and open your financial relationship is with your partner, the more likely you can end up with a win-win situation.
4. Avoid life-changing decisions
When a divorce begins, many people make the mistake of change beneficiaries in their bank statements and life insurance policies. This is not a smart move. Let the process to take its course. Allow the judge to decide the results of your divorce.
If you wait for the court judgment before you make major changes, you won’t break the law. Sometimes, a divorce gets so ugly that the person you loved sues you for criminal charges.
Prepare yourself for the possibility of an ugly divorce. Not all divorces are amicable.
Statistics show women don’t do enough to prepare themselves financially. Whether you’re a man or a woman, be ready to prove your part in the financial growth you shared as a couple.
5. Spend and Save Wisely
The last way to financially prepare yourself for divorce is to be careful and transparent with how you spend your money. This can be a big advantage during the hearing. Don’t be in a hurry to buy more.
If your marriage is on the verge of ending, this is a smart move.
Don’t hurry to make changes. If you have a joint account with your partner, continue using it. If your relationship is good despite the likelihood of divorce, talk to your spouse about spending habits so you both can afford your needs during the proceedings.
If communication is broken, seek professional help to let the courts determine how you both will spend the money until your divorce is final.
Prepare for a Demanding Divorce
If you’re on the verge of divorce, follow these steps even if you feel like you and your partner will be amicable. Learn how to financially prepare for a divorce.
It’s normal for a divorce to test you emotionally and financially, especially if there are children. Sometimes these frustrations lead to ugly incidents. Prepare yourself psychologically for such possibilities.