Divorce Financial Advice For The Recently Separated
June 2, 2022 | Daniel Dewitt
Deciding to separate comes with a unique set of financial challenges. It’s not just about dividing income. Shared assets such as property need to be considered. Child support may come into play. Investments may be split up or disappear entirely. It can be a confusing time financially, but there are many ways to get through it. Here is some divorce financial advice for your next phase in life.
Remember This Divorce Financial Advice To Help You
Make Some Basic Changes
Perhaps the single best divorce financial advice is preparing for the inevitable by making some basic changes. Among the top priorities are closing any joint credit accounts and taking your spouse’s name off credit cards, bank accounts, and employer records. You should then open new bank and credit accounts just in your name and begin to establish proper credit in your name only.
It’s also important to change your marital status on important items like tax records, titles to property, health insurance, and utility bills. If your spouse was the beneficiary of a will or trust or was given medical directive power, you’ll need to legally change the designation. You may also need to change beneficiaries on life insurance policies, your 401(k), or your pension.
Outline Your Assets
Another important step you need to take is to understand which assets you have or have the rights to, individually and formerly as a couple. Each state is different when it comes to asset division, so it’s good divorce financial advice to consult with a lawyer to make sure you understand the financial laws governing your state as part of separation and divorce.
There are usually two forms of property related to divorce: community and separate. Community property is usually anything that is obtained during a marriage, such as earned income, real estate, and even debts. Community property is equally shared by spouses.
Separate property, however, is typically assets that were owned solely by either spouse before marriage, including inheritance and property. The time to take stock of all your assets is either before you legally separate or right as you file so you understand how your assets should be separated.
Create A New Budget
Expenses that were once shared will now have to be covered singularly, but for those who have children, it may get complicated when it's time to create a new budget after a separation. The best divorce financial advice for a new budget is to be thorough and flexible.
You may now have to include monthly child support, or perhaps you need to cover a child’s needs that your spouse technically covered because of their individual income. Child-related expenses aren’t the only changes that need to be taken into account when making a new budget.
There may be a reduction in income or new income streams to take into account. There may be a new mortgage or perhaps rent if you move into an apartment. You may have to come up with a new savings plan or extend the time frame to reach certain goals. Whatever the case, starting things out with a new budget is key.
Cut Back On Spending
The simple truth is that, with a divorce, you will likely not be able to spend as much and spend it on all of the things you had been used to. You will have to make changes to your spending to make sure your finances can keep up with your new life.
Part of your new budget will likely include some spending cuts, especially with extras such as travel and certain comfortable luxuries. Another piece of divorce financial advice you should follow is don’t take on more financial responsibility when you are recently separated.
An Online Title Loan Can Help With A Financial Emergency
Coping with a financial emergency such as a hospital bill, emergency travel, or home and car repairs can be challenging, especially when you’re going through a divorce. An online title loan is an option for relief that uses your car’s title as collateral in exchange for a short-term loan.
You can also keep your car and drive it as usual for the duration of the loan. It’s easy to get started. Simply fill out the short online title loan form on our homepage. Soon after your submission, one of our loan representatives from the nearest Arizona title loan location will give you a call to guide you through the rest of the quick process.
Use These Tips To Make Your Divorce Finances Simpler
If you are going through a divorce, the last thing you want to do is make things even more stressful by not understanding how it’ll affect your finances. These tips can help you understand what to look for to make your divorce simpler. And if you want to get an online title loan for emergencies, fill out the online form on our website to get started.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.