Going through a divorce is likely to significantly change your financial situation. Here are a few tips to help you prepare.
You should consider all financial obligations you and your spouse have, which expenses you will be responsible for, and how much cash you will have available after you separate. Compare your monthly income to what you think it will cost to live without your spouse's income. Review your bank statements, credit card statements, and large expenses that are likely to occur during the next year. Developing a budget on the front end will help ensure that you don’t end up in financial trouble during and after the divorce proceedings.
Consider opening bank accounts in your name if your spouse has access to your current accounts. It is a good idea to have a safe place to transfer money that your spouse cannot access. It’s not uncommon for spouses to try to hide money when they find out they are getting a divorce. Most attorneys would advise against hiding assets and that you be vigilant of your spouse's financial movements. If you end up in court, any hidden assets are likely to be revealed, and the judge will normally factor that into what they see as a fair division of assets.
If you suspect that your spouse will try to prevent you from withdrawing money from your joint account, you should consider moving a portion of the funds in your joint account into a separate account at the right moment. You should consult with your attorney before you move any funds to avoid making any decisions that could negatively impact you later in the divorce process.
Changing your marital status is likely to affect your taxes. If you are employed, it may be a good idea to notify the appropriate individual at your employer of your planned marital status change. The amount of taxes you will owe can vary depending on how much you make and how much your spouse makes. If you make significantly more than your spouse, the amount of taxes you owe on your income is likely to increase when you file your taxes as a single taxpayer. If this is your situation, you can increase the amount of taxes that are withheld from your paychecks to avoid having to pay a large sum during tax season.
If you and your spouse are on the same health insurance, you should consider what the impact will be after your spouse becomes aware of your intention to divorce. Regardless of whether you provide health insurance for your family or your spouse does, your divorce is likely to change how much you are spending on health insurance. Discussing the costs of health insurance with your employer on the front end can help you avoid a surprise that could impact your budget significantly.
If you and your spouse share car insurance, this could also impact your budget post divorce. Most car insurance providers offer discounts that you may not be able to take advantage of with only one vehicle on the policy. It is a good idea to reach out to your policy provider to get an idea of how much your divorce will change the price of your car insurance policy.
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