Today, I’m talking about a topic that can be one of the most difficult times in your financial life: going through a divorce.
Not only is divorce an extremely emotionally stressful time, it is often a huge financial stressor as well. You will be forced to make decisions that are likely to impact your current and future financial situation. The most important piece of advice that I have to offer here is not to go at it alone. Many couples will seek a family law attorney or mediator, but it may also be extremely helpful to consult a financial planner and a tax advisor to help you make those tough decisions as well. For example, financial experts can help you to understand the consequences of dividing property, debt, and retirement assets. A tax advisor can guide you on tax issues you will face.
Although we always hope for the best, it’s wise to plan for the worst, even in the happiest of times. So, one thing you can do to financially protect yourself, is to make sure that you are knowledgeable about combined finances with your spouse or partner. Even if one spouse is in the driver’s seat, the passenger should know where they are headed, so to speak. Make sure you have a basic understanding of household expenses, financial accounts, and how and where to locate important financial information, including account passwords.
If divorce is inevitable, begin to track household expenses carefully, start gathering documentation, refrain from making any large financial decisions like changing beneficiaries, start getting more conservative with spending, and more aggressive with saving.
Divorce is usually not easy, so be prepared for it to take longer than you think, cost more than expected, and focus on one task at a time, keeping deadlines in mind to help you stay on track. Lean on a support network to help you get through the tough times: trusted friends, family members, a counselor, and financial experts. Try to see things from a long term and big picture view, rather than the immediate emotions.
If you need help navigating the financial waters of a divorce, please reach out to see how I can help you!
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