With so much going through your mind as you move toward the divorce process, it's possible to overlook various details. For example, there's a lot to think about in regard to your finances.
Here are five things you can do to prepare your finances for divorce:
- Review your budget: Your income and expenses are sure to be different in the future, so now's the time to review your budget and make the necessary changes. For example, if your spouse was the primary breadwinner during your marriage, you must implement a plan for earning your own income.
- Track expenses: With your finances changing in many ways, tracking your expenses will give you a clear idea of how much money you need to live. This will also position you to eliminate any non-essential expenses.
- Gather all necessary documentation: This can vary from one person to the next, but it's good to start with bank account statements, retirement account statements, credit card statements, investment account statements, recent pay stubs, a list of assets and debts, and income tax returns.
- Don't make big purchases: You're going through a difficult time in your life, so you may be tempted to make a few big purchases, such as a new car, to help you feel better. Don't do this before your divorce, as it can complicate the property division process.
- Review your estate plan: Don't make any decisions until your divorce is final, but review your estate plan with the idea of adjusting it in the future. For instance, you probably want to remove your ex-spouse as your beneficiary. You should also review guardian designations, life insurance policies and powers of attorney, among other key documents.
