Saturday, April 13, 2013, AM | 1 Comment
Throughout our lives we will face many stressful situations, for some, this may include going through a divorce. If you ever have to face a time like this, you should know that it is important that you protect yourself financially.
It is understandable that going through a divorce will leave you feeling mentally and physically drained, but you will still need to put in the energy to assure yourself that your future will be alright. Formulating a plan to save yourself financially while dealing with a divorce will not only better your future, but will could save yourself in the long run.
While feeling overwhelmed over a divorce, it is easy to get side track on things that need to have your attention, such as personal finances. If you have the willpower to focus on your money, then you will only better yourself.
When it comes to having to deal with important finances such as your assets, your best bet is to contact a lawyer, tax advisor, and a home loan expert. It is not recommended that you deal with these types of finances on your own, and they should be left to the professionals.
Aside from major financial dealings, there are still many things that you can take care of on your own, such as your goals. This may be a big adjustment that will take some time to get used to. If you had a budget with your spouse during your marriage, it is now the time to make one for yourself.
It is quite common that men will see an increase in in household income, whereas a woman might see a decline during this time. Knowing your financial means and boundaries will help you formulate and execute a budget that will only help you out once the divorce is all said and done.
Along with setting financial goals for yourself, you also need to take into consideration where you will be keeping your money. One important thing to look into at this time is your current investments. Depending on where you kept your money while married, you might now look to transfer it elsewhere.
Typically a 401K or high interest savings account would be a good idea for this type of situation due to the low risk involved. Also, it would be wise to review your beneficiaries. Odds are you had some, if not all of your assets going to your spouse. Now would be the right time to review your contract and make any changes you feel necessary. This is actually a mistake made by many people who are going through divorce, and typically the children of the parents are the most effected.
Having the ability to maximize your cash flow while going through a divorce will turn out to be one of the best things you can do for yourself. It is recommended that during this time you talk to a professional about what would be best for you. Getting help will allow you to get an opinion on what is the best way to improve your household income.
Like mentioned earlier, you will want to take low risk steps to keeping your money safe, and even possibly make more. For instance, you can get yourself a second job or even work more hours at your current job to increase your income. This could be used as a stress reliever to take your mind off of the divorce and home situation.
The biggest issue that people have who are facing a divorce is that they typically go into debt and possibly ruin their credit. It is advised that you should never take out any sort of loan immediately after a divorce is finalized. The big reason for this is that while during the divorce your credit may have taken a big hit.
At all times during a divorce, you should be aware of your credit rating and if it starts to drop that should raise some red flags. Your credit is very important if you want to make any significant big purchases in the future and if it is too low then you may find yourself in trouble.
To help keep your credit score in good standing, there are a few things that you can do. The biggest and probably most important thing, especially if you have a joint bank account with your ex is to put them into your name. This will eliminate them from racking up too much debt, possible identity theft, or even committing any type of fraud.
Being able to keep track of your finances during a divorce is critical to your wellbeing and future. Formulating a plan and keeping track of your finances and assets will help you out immensely in the long run. The thing that cause a lot of people hardship post-divorce is accumulating a large amount of debt. If you keep yourself out of debt you will be in a good position once your divorce is finalized.
Mark Scheets is a writer for Total Mortgage Services. For more information, check out our full guide about divorce financial management as well as our Total Guide for a complete list of informational resources.