(Newswire.net — October 21, 2017) — Divorce is stressful for numerous reasons, but one of the most palpable pain points has to do with finances. Whether you’re currently going through a divorce or have just completed the process, it’s imperative that you give your finances some careful attention.
Try These 5 Practical Tips
When you marry someone, your lives naturally become intertwined – relationally, mentally, emotionally, sexually, and financially. And while it can take months or years to unravel each of these tangles and move on, the financial ramifications can last for decades. If you aren’t careful and fail to make smart, calculated decisions, you could end up setting yourself back.
As you move through the divorce process, you should pay careful attention to your finances and the practicality of your split with your spouse. Specifically, it’s wise to think about the following.
1. Pursue Divorce Mediation
One of the smartest things you can do is pursue divorce mediation. While it helps in other areas of your split, it can be monumentally significant when it comes to the financial part of the equation for two reasons.
First, with divorce mediation, fair distribution of assets is one of the primary goals. As Equitable Mediation explains, “Ensuring that both spouses receive a settlement they both think is equitable is one of our primary goals. One spouse can’t ‘win’ at the expense of the other.”
And second, since the average cost of divorce mediation is between $5,000 and $9,000, even the most complex mediations still cost significantly less than an attorney-driven process, such as a collaborative or litigated divorce. You and your spouse will have more money left over to start your new life, post-divorce, when choosing mediation over lawyers.
2. Create a Post-Divorce Budget
No matter if you were the breadwinner of the relationship, or you were dependent on your spouse for support, your financial situation is going to take change following a divorce. This means you need to create a new budget in order to account for the changes.
A post-divorce budget will likely be a trimmed-down version of whatever budget you previously had. Not only will you need to be more aggressive with your savings and retirement goals, but you may also have to account for new ongoing expenses like child support, spousal support, and attorney expenses.
3. Close Joint Accounts
One of the first things you need to do is close any joint accounts you and your ex-spouse had together during the marriage. This includes checking accounts, credit cards, mutual funds, and savings accounts. The process for how you want to close these accounts and deal with the assets or debts should be discussed in the mediation process.
4. Update Beneficiaries on Accounts
If you have things like life insurance, a 401(k), an IRA, and other financial products with value attached to them, it’s important that you go ahead and update the beneficiaries on the accounts. After all, the last thing you want is for your life savings to go to your ex-spouse, rather than your children or future spouse.
5. Closely Monitor Your Credit Report
Throughout the divorce – and in the months following it – it’s wise to keep tabs on your credit report. This keeps you familiar with your score and signals any negative changes in your score – such as someone opening up credit in your name.
Be Smart With Your Money
There are plenty of things more important in life than money, but it sure makes a divorce much smoother if you’re able to deal with the financial stresses that so often frustrate couples in the midst of a split. Be smart with your assets and make decisions that set you up for success down the road.