The end of your marriage is a traumatic experience. It may be hard for you to think about finances while you are going through emotional turmoil. But divorce is expensive. Splitting up assets, paying legal fees and living on a single income may catch your wallet by surprise.
It is crucial to safeguard your money so you can be financially stable once your divorce is final. Here are some smart steps you should take to mitigate the financial damage.
1. Organize everything
One of the first steps you should take is writing down important details and making copies of your financial resources, including the following:
- Bank accounts
- Credit card accounts
- Retirement plans
- Insurance policies
- Tax returns
Organizing your financial documents will help you save time and money. When all of this documentation is readily accessible, you will be able to follow up with your lawyer quickly and efficiently. This will also give you an idea of your financial situation.
2. Update your estate plan
Remember to update all your legal documents. Your spouse may be a beneficiary on a retirement account, bank account or insurance policy. Review all your beneficiary designations and update your will as necessary. After all, you probably do not want your ex to inherit your assets.
3. Create a financial plan and budget
Living on a lower income will be a difficult adjustment. A budget is a lifesaver when learning how to live within your means. Make sure you plan for all expenses and income, such as the following:
- Property sales
The amount of money you can save when you stick to a budget will surprise you.
Breaking up with your spouse may be as expensive as it is exhausting. Fortunately, you can follow some frugal steps to minimize the damage your divorce has on your finances.