Divorce can take a tremendous toll on both a person’s emotional and financial well-being. Nationally, the average cost of divorce per person in the U.S. is around $15,000, which includes hiring attorneys, court fees and enlisting the help of other experts such as financial analysts. Of course, how much your divorce will cost can also vary by the number of assets in your marriage and whether your divorce is highly contested.
If you’re not careful, a divorce can be costly not only in the short-term but can have a long-term impact on your financial health if you’re not careful. Here are a few ways you can prepare your finances for divorce and your life’s next chapter:
Take a financial inventory
Whether you are considering divorce or have already begun the process, now is the time to make a list of your financial accounts. This inventory should include any income, debt, bank account balances, retirement accounts, property, vehicles and valuable assets for both you and your soon-to-be-ex. It’s not unusual for one party to know more about the marriage’s finances than the other. If that person is you, try to gather as much information as you can.
Start separating your finances
Untangling your finances from your partner as soon as possible helps to protect you from poor financial decisions made by your spouse during your divorce and start working towards financial independence. For your personal transactions during divorce, you should open your own bank account and update your direct deposit information with your employer to ensure your spouse doesn’t get any of your income.
Establish financial independence
After a divorce, establishing your financial independence early is essential since you’ll now be the sole breadwinner of your single household. A few steps you can take to accomplish this include:
- Creating a new budget.
- Opening your own accounts, including credit cards, utilities, life insurance policies and more.
- Start building credit.
- Enlist the help of a divorce attorney to ensure your settlement is fair.
Divorce is painful both emotionally and financially. However, by preparing for finances for the process, you can lay the groundwork to start enjoying independence in your new life.