Divorcing Financially

Divorce is not an easy thing to do and add to that finances and it breeds the perfect ground for mayhem. But, it doesn’t have to be a treacherous situation. Divorcing financially is doable if you prepare and are aware of what steps to take.

Here are some things to consider:

  1. Emotionally divorcing from your finances – your attitude towards financially divorcing is everything to having the most civil divorce and to taking care of yourself financially. Be aware of your emotions and maintain an open mind to your partner. Practicing simple body awareness will facilitate in your response as you go through the process. Pay attention to where in the body you are being impacted and practice mindful breathing. Remember to take walks to calm yourself down and if you meditate, take a 5 min meditation break. Keeping yourself centered and calm will facilitate in creating a harmonious experience.
  2. Create a budget – this is the single most important step to take. See my article on budgeting. By creating a budget, you will see how much money is needed independently. This will also facilitate in determining child support if you have children and alimony.
  3. Open a bank account – this will begin the process of detaching from your spouse. It doesn’t have to start off with a large deposit. $100 deposit would suffice. The key is to start separating slowly from the joint account. If you already have separate accounts, nothing needs to be done.
  4. Gather your assets – if you are not the one who handles the finances ask your partner and do it together. Prepare a spreadsheet of all the assets and their worth. (This is a good time to start thinking of how your assets will be divided and which ones will be liquidated to payoff your liabilities if you have some.)
  5. Gather your liabilities – it’s important to determine how much you will owe and how this will impact your budget.
  6. Separate the bills – after you have determined who will be keeping which assets and liabilities transition those bills accordingly.
  7. Taxes – speak to your accountant about the tax implications, so you will not be surprised by Uncle Sam.
  8. Insurance – determine what insurances you will need to make sure you and your children are protected. Now that you will be divorced, your health insurance will change. Also, figure out what other insurances you will need – property, car, additional disability, and life etc.
  9. Beneficiaries – update your beneficiaries some of the documents to consider would be retirement accounts, any work related benefits, insurance policies. Remember your will and update your beneficiaries some of the documents to consider would be retirement accounts, any work related benefits, insurance policies. Remember your will and medical proxy.
  10. Credit Report – Before the divorce is final, monitor your credit report to make sure there aren’t any discrepancies. Debt acquired in the marriage under your spouse may be under your credit report too. Even after the divorce, check it periodically.

Through each of these steps allow yourself to experience the detachment. Financially divorcing is not just about the money. It’s about releasing the dependency you shared as a couple. In most marriages, one person is solely responsible for the finances. If you were that person, this might not be as hard for you, but if you weren’t, this could be a challenging situation. Be gentle with yourself and take the time to care for yourself. There may be some codependency issues you may have to resolve first. This could also be frightening if you are not money savvy. Take your time going through the process and affirm that it may not be easy, but it is doable.

Remember to seek professional advice if you need to. A good therapist, accountant, lawyer and, of course, a friend are all great support systems to help you maintain clarity of mind and stability. Being civil and maintaining a good relationship with your ex is achievable.

References:

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