Financial Steps To Take Before Divorce, #211
We’ve all heard the statistics that almost half of all marriages end in divorce. And divorce comes at a large cost. That’s why you should come up with a plan for life after divorce. Look at your net worth, put together a budget, and make projections for your future. Let’s get you prepared as you can be.
To do that, I’m launching a three-part series on navigating the financial considerations when going through a divorce. No one wants to plan for the demise of their marriage. I get it. But if you know you’re about to go through the process, there are steps you can take to make it easier.
You will want to hear this episode if you are interested in...
[2:04] Do half of all marriages end in divorce?
[4:50] Gather key financial documents
[7:59] Take a look at your income
[8:18] Consider potential job opportunities
[9:03] Look at your individual credit score
[9:40] Consider working with a financial planner
Gather key financial documents
If you aren’t managing the household finances, this is especially important. You need to understand how your household is doing. Gather things like:
Checking, savings, and investment account information. You need to know where the money is and how much is held in the accounts.
Have an idea of what property you own (which may be easy if it’s simply your primary home). Know the value of any assets you have.
What debt do you have? Do you have credit card debt, lines of credit, mortgages, or other personal loans? Know what you owe (and how debt may be split when divorced).
What are your household expenses? What are you spending? Look at things like insurance, utilities, home maintenance costs, etc.
Do you have any retirement accounts or pensions? What will your Social Security benefits look like?
Take an in-depth look at all of this information. When you divorce, that net worth will be divided in some way. Getting a handle on that is important to understand the changes you’ll need to make.
Take a look at your potential income
You can contact your accountant to get that information if you don’t have it readily available (or can’t get it from your spouse). If you’re not working, it’s time to get a handle on what you may be able to earn if you go back into the workforce.
If you won’t have income or assets to support yourself, consider the job opportunities available to you. What are your skills? What jobs are out there? Can you improve your skills by taking courses? Do you have any licenses you’ll have to renew?
What does your individual credit score look like? After a divorce, you might have to take out additional loans for a mortgage, car, student loans, etc. You’ll need good credit to do that. If you don’t have a good credit score, look into ways you can improve it quickly.
This is a great time to engage a financial planner for assistance. Listen to hear other things you’ll need to consider when going through a divorce.
Resources Mentioned
Subscribe to the Retire with Ryan YouTube Channel
Get my free budget template and net worth statement