The divorce process, as some Connecticut residents discover, can be full of surprises, especially financial ones. One way to prepare for them is by making a financial plan that begins even before you announce your intentions to seek a divorce.
What to do before the divorce
Before taking the first steps towards the end of the marriage, you should make an inventory of your assets, both joint and separate. This includes getting copies of tax returns and bank statements that you might have in the house. Take this time to open accounts in your own name, including checking, savings and credit cards, as a divorce can create significant changes in your finances which might affect your chances of being approved for a credit card later on. Finally, figure out what money will be available to you during the process so you can make wise choices about your expenses.
Make a realistic budget
Before the divorce, you should make a realistic estimate of your expenses so you can create a budget. The budget should include your fixed expenses and anticipate other expenses that might come up during the divorce. The budget should include things like:
- Your rent or mortgage payments
- Your utilities
- Loan or car payments
- Food and other miscellaneous expenses
- Anticipated expenses due to the divorce, such as legal fees
Do not forget about retirement
Whether you are close to retirement or many years away from it, do not overlook the financial impact of the divorce on your retirement goals. During this time, assess your retirement accounts, such as 401(K)s, pension plans and social security benefits to see what you will need to do to maintain a healthy financial plan for retirement.
While you cannot anticipate all the financial surprises a divorce might bring, making a clear plan can protect your interests during this process. It might also be the first step towards financial health post-divorce.
