How To Make Your Finances Work During A Divorce
Friday, September 13, 2013, 1:00 AM | Leave Comment
As a married couple, you and your spouse have built a life together, and this life includes a financial history. If you have decided that divorce is inescapable, you will have to learn how to separate your finances, establish your own credit history, and how to manage on your own so that you can move forward with your life.
Going through a divorce is not easy, but if know how to make your finances work early on in the process, you can eliminate some of the stress.
Here is your straightforward guide on the financial decisions you will face in the near future and recommendations on how to get through this turbulent time.
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Maximize Your Cash Flow
Financial issues arise in a majority of divorces, and you need to build a team of professionals who will help you resolve these issues as they arise. Mediators and family law attorneys Indianapolis can help you negotiate financial issues like child support, division of assets, and alimony, but you need to be ready to find ways to maximize your cash flow early on in the divorce because you will soon be living in a single income household.
To maximize your cash flow, consider doing the following:
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Create a Budget So That You Can Start Tracking Your Money
If you have been married for years, you are comfortable covering your monthly expenses because you have two incomes to work with. Now, you need to pay all of your monthly expenses with your income, and this can be challenging.
You may also have to budget in child support or alimony payments if your lawyer believes you will be ordered to pay these forms of support. Sit down and create a detailed budget to see how much you will be spending monthly.
For one month, document everything you spend money on. This will help you cut down on your spending by identifying what is necessary and what is not.
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Control Your Debt
After you create a budget, take a deep look at your debt. You and your spouse will still need to pay down the debt you have obtained together, and you should not take out more debt to cover expenses if at all possible.
Create a plan where you can pay down the balances on loans, credit cards, and open lines of credit.
Try to avoid bankruptcy at all costs, and be sure that you and your lawyer discuss fair debt obligations during the negotiations process so that you are not left paying everything by yourself.
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Increase Your Income
You might have extra time when you are newly single. This could be a great time to get a second job to boost your cash flow. Start applying for night jobs, or look for a part-time weekend job that will help you cover additional expenses with your lower household income.
If you have dreamed of being an entrepreneur and using your talents to earn money, you may even want to consider starting a side business that you have always dreamed of starting.
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Establish Your Own Credit
For years, you and your spouse have established credit together. Now is the time to establish credit your own credit. Start by ordering your score, pay your bills on time, repair your credit, build your credit, and make all of your payments faithfully.
Once the divorce is final, you may face having to rent a property until you can establish enough credit in your name to buy a new home or to refinance your existing loan.
Only take out credit cards and use them if you can afford to pay the balance off quickly. This is an excellent way to build credit and even get credit card rewards.
Divorce is already a difficult time, and finances can make it even more difficult. Maintain your bills, come up with financial goals for the future, and start to build your new life.
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