If you are going through a divorce, there is a lot more to deal with than just the emotional issues. There are also finances to think about. After all, you are going from a two-income to a one-income household, and you need to learn how to adapt so you can actually do more than simply survive from month to month. No matter how difficult the emotional end of things get, you really do have to get a handle on your finances, not only for yourself, but for any dependent children that you are responsible for.
Forget about asking friends, co-workers, etc. for financial advice. They may mean well enough, but they don’t always give the advice you really need, unless of course they are trained financial counselors. Here are a few personal finance tips for divorce that you should read about.
Personal Finance Tips to Keep in Mind When Divorcing
1. Close Joint Accounts
The first thing you need to do is get your own banking accounts, and close out any joint accounts that you hold with your estranged spouse. Remove their names from any accounts that you hold, including any credit cards that are yours but they have been allowed to use. The last thing you want is for an angry ex to run up your credit cards and empty your bank accounts.
2. Open New Accounts
Once you close out your joint bank accounts, it is time to open your own accounts. Make sure that they are set up for bill payments, so you don’t end up getting behind in the important bills. You don’t need to have your electricity, Internet, etc. cut off because you weren’t able to make a payment since the bank accounts have been closed.
3. Change Your Status
You will need to change the relevant information (name, marital status, etc.) on income tax records, post office records, your driver’s license and other licenses, property titles, utility bills, health insurance, professional titles, etc.
4. Change Your Will
This will cost some money because your attorney needs to be involved, but it is worth it should something happen to you after becoming divorced. Make sure that you disinherit your spouse. Take them out of your will, remove them as your power of attorney, etc. You don’t want them making any final decisions on your behalf.
5. Change Beneficiaries
If you have life insurance, you will need to change your beneficiary. Also make sure that you change the beneficiary on your 401(k), IRA, and anything else that you have your spouse named on as beneficiary.
6. Get a Personal Finance App
You need to keep track of your spending now more than ever. So, get yourself a good personal finance app. Use it to track alimony, child support, medical expenses, and any other expenses that are related to the divorce.
7. Get Your Own Credit
If you do not have credit of your own, it is time that you establish some. This can take awhile, but it can also be as simple as opening accounts in your own name, such as utility accounts. As long as you are making payments in full and on time, it will help to establish your credit.
8. Get Credit Counseling
It may be that you have bad credit, and you need to find ways to fix it. The first step is to seek credit counseling. Not only can this help you to learn what you need to do in order to get back on track and stay there, it can also help you manage your debt. Most credit counseling agencies are able to work with your creditors to help bring your bills down to payments that you can manage, even on a single income.
List of tools that may help with finances during divorce
- SupportPay – helps parents split the costs of raising children and review expenses productively when they disagree.
- Sell Macbook – sell your tech gadgets and split the money.
- iSplitDivorce – divides up your assets and debts, to make visual decisions about “who gets what” more quickly.
- Divorce Coping Tip of the Day – emotional and practical tips during the divorce.
Related Content
- What You Should Do If Your Spouse Refuses to Sign Divorce Papers
- The Divorce School Opens on April 1
- Divorce Prevention Tips: Some Important Facts About Divorce
FAQs
4 financial steps to prepare your finances for divorce
- Assets: checking, savings, investment accounts.
- Property: home, land, vehicles.
- Debts: credit cards, lines of credit, mortgages.
- Household expenses: phone, Internet, insurance.
- Retirement accounts: IRAs, 401k plans, pensions.
That means you cannot empty your joint account unless your spouse consents or you get a court order first. If you are considering divorce, it's important to prepare financially. Our attorneys can advise you regarding what information you need to gather and how to address your fears of having no funds.
What is the best way to split finances in a divorce? ›
Close any joint credit lines. You'll also need to divide the assets you have in investment and retirement accounts. If you own a home with your spouse, decide who keeps it, or sell it and split any proceeds. If the home has a mortgage and you want to keep it in your name only, you'll need to refinance the loan.
How to legally stop a spouse from spending money? ›
An automatic temporary restraining order (ATRO): This legal document is a restraining order placed on each spouse. The ATRO focuses solely on property, preventing married couples from spending money that would upend and alter their marriage's current situation.
How to leave your wife without losing everything? ›
12 Steps to Protect Your Money in Divorce
- Learn how much money you have. ...
- Don't hide money. ...
- Separate your bank accounts. ...
- Create an emergency fund. ...
- Hire professionals to help you. ...
- Make sure the paperwork is filled out correctly. ...
- If you're relying on support, the payer should have insurance. ...
- Think about your own insurance.
6 money tips to help you financially survive a divorce
- Seek financial advice. If your spouse is the money-manager in your household, you'll need to build some skills before going it alone. ...
- Take stock of your assets. ...
- Be frugal. ...
- Recall whose name is attached to what. ...
- Prepare to sacrifice. ...
- Agree to work together.
Under California law, a marital relationship is a confidential relationship requiring the highest good faith and fair dealing. Accordingly, California law provides that all spouses have a duty to make a full disclosure of all their assets and provide equal access to all information related to their finances at divorce.
Can a wife take all the money from a joint account? ›
If the funds in your joint bank account are considered separate property and owned exclusively by your spouse, they may legally be able to drain the account. Similarly, even if the account is community property, a spouse may be able to withdraw money for reasonable living expenses, legal fees, and children's expenses.
Can my wife take half my bank account? ›
California Divides Joint Bank Accounts 50/50 in Most Divorces. California's property division law is different than in most other states. Rather than dividing assets and debts according to what is fair or equitable, the courts in California split everything down the middle.
Who pays the bills when going through a divorce? ›
The party responsible for debt after divorce depends on multiple factors, like where you live, any prenuptial agreements and whose name bears the loans or debt. Generally, the person who signs the loan agreement is the responsible party for not only the debt but also any late fees incurred.
During the divorce proceedings, the couple is still legally married, and as such, they may need to continue contributing to household expenses and bills to maintain their shared living situation. This can include costs related to housing, utilities, groceries, and other day-to-day living expenses.
How do you split finances when living together? ›
50-50 Bill Split
Splitting shared bills down the middle is one of the easiest approaches to a joint financial life. Each person pays half. This straightforward approach makes budgeting as a couple consistent. Each person pays half the rent, subscriptions or insurance from individual accounts.
Can I spend money while going through a divorce? ›
For example, if you have assets classified as individual or separate (non-marital property) from your shared marital assets, you may use those to make your purchase. Generally speaking, you want to spend conservatively and carefully while going through a divorce.
What does waste of marital assets mean? ›
Waste of marital assets in a divorce matter typically is defined as excessive spending by one or both spouses during the course of marriage dissolution proceedings (or in the period of time leading up to a case). This type of wasteful spending has a number of hallmarks, including the fact that it is unnecessary.
Do I have a right to my husbands money? ›
California is a community property state, which means that following the death of a spouse, the surviving spouse will have entitlement to one-half of the community property (i.e., property that was acquired over the course of the marriage, regardless of which spouse acquired it).
How much money should I save before divorce? ›
Conventional wisdom says that your savings should be able to cover about three to six months' worth of expenses, including bills and other necessities.
Who benefits more financially from divorce? ›
Economic quality of life
Ultimately, the overall economic quality of a man's life, based on earnings and amount spent on living expenses, increases after his divorce. He continues to earn more but bears fewer family expenses. The overall economic quality of a woman's life, post-divorce, decreases.
How do people afford living after divorce? ›
Here are 10 tips on how to survive financially after divorce:
- Create a post-divorce budget. ...
- Monitor your credit report closely. ...
- Review your savings strategy. ...
- Cancel joint accounts and open new ones. ...
- Change your account passwords. ...
- Review auto-renewals and automatic debits. ...
- Change your beneficiary designations.
