Divorce and Money Tips for Navigating New Terrain

When you’re going through a divorce, everyone has advice, from friends to co-workers, relatives and, yes, even casual acquaintances. And usually they really are just trying to help. But when it comes to legal and financial decisions, it pays — literally — to make sure you’re getting the best advice possible.

That’s why we recommend that you create a team of experts that includes your attorney as well as an accountant, financial planner, realtor and counselor/therapist depending on your situation. Why? Because going through a divorce requires that you become the CEO of your new life. But don’t just take our word for it; here are five divorce and money tips that point out aspects you may not have considered.

3 Ways Divorce Can Affect Your Credit Score

This article talks about the how 1) divorce-related costs, 2) failure to make payments and 3) running up debt, can impact your credit score during divorce proceedings. The author then goes on to say:

Once it’s established that you’ll be getting a divorce, separate all joint accounts as soon as possible. Remove authorization for your spouse on any accounts that belong solely to you, and work out an agreement (in writing) to handle any joint debt payments. If needed, sell off some assets of your own or reach an agreement to sell joint assets to help pay for the legal costs associated with the divorce. By taking these steps, you may be able to keep your credit score from becoming a casualty of your divorce.

4 Myths About Divorce and Money, Debunked

The four tips address adultery, credit cards and assets as well as this myth:

Myth: I didn’t work during my marriage, so I’ll get alimony payments for life. Fact: If you didn’t work during your marriage, you will probably receive alimony payments. But these payments might not be as permanent as you might think. Today, nonworking spouses usually receive their alimony payments, also known as spousal support, for a limited time. The goal is to provide the spouse with some financial support until that person can find a job or pay for an education. Don’t expect an unending stream of financial support from your ex-spouse.

9 Tips to Help You Budget Your Money After Divorce

This article covers many of the basics of budgeting, including this reminder that can help make the process a little less painful.

Remember your budget changes don’t have to be permanent, just until you can increase your income. Once you have been on your own for a while, without the benefit of a double income you will be able to better gauge how far you can stretch your income. It helps to eliminate extras if you know you can have them back at some point.

Top 7 Financial Tips When Facing Divorce

This article points out that 59% of people say finances played a major role in their divorce decision. It then goes on to list some budgeting basics while also going into details such as the tax ramifications of alimony and this tip:

Never under-earn to maximize the child support or alimony you can claim from your ex (or for that matter, to minimize how much you have to pay your spouse). You’ll want to hit the ground running to reignite your earning potential in the short term, not lean heavily on your ex when unnecessary. This only holds you back in countless personal, professional, and financial ways. Moreover, it can add significantly to conflict and legal bills for years to come.

Do NOT Get Divorced Until You’ve Done These 7 Things With Your Money

This article doesn’t mince words, reminding readers of the financial realities of divorce including this:

Let go or pay the price. The hard reality is that divorce is an impersonal transaction. The law doesn’t care about who did what to whom, and the law is not focused on what is fair. It is focused on what is equitable based on precedents and guidelines established long before you arrived at the courthouse.
Any hurt, anger, or entitlement you are feeling about your ex or the situation you’re in will not serve you in this process — it will actually cost you money.

The article continues: “Remember, every minute your attorney is spending on your behalf is costing you money. There are limits to what the law will allow, so trying to push beyond those limits will be fruitless, time-consuming and expensive — something you might not want to hear and something your lawyer might not want to tell you.

None of your negative emotions will get resolved through your divorce. All the hurt and rage focused on your ex is just a time-consuming, costly distraction away from the bigger picture. This divorce is about YOU and building a new life for yourself — focus on the bigger picture.

Find out what the law will allow. Don’t waste precious time and money on fighting for something that doesn’t exist. Create a clear vision of what you want for yourself when this is all over. Having a clear vision is essential in helping you make better decisions and negotiate a better future for yourself.”

This article originally appeared in the IRC Wealth blog