Whether the ink is barely dry on your marriage certificate, or if you’ve been married for a few years or decades, getting a divorce is a mentally, physically and potentially financially draining experience. Here are some basic divorce financial planning tips to protect you in the event of a future divorce.
The impact of a divorce has tentacles that creep into many aspects of your life including:
We don’t want to be alarmist, but statistics show that around 50% of all marriages will end in divorce. While you don’t want to dwell on that statistic during your marriage, you do want to take steps to prepare and educate yourself and consider what might happen long term.
What can you do to protect yourself in the event of a divorce?
From the beginning of your marriage maintain (or establish) a financial foundation for yourself and your children. Joint bank accounts are great, but you need to have your own financial identity, bank accounts and credit score. If you get divorced you will need to have money for the divorce mediator, living expenses and unexpected costs that will arise when faced with day-to-day living expenses.
Build your own credit. If you find yourself in need of an apartment, many owners will require a credit check in addition to first and last month’s rent and security deposit. Plan to keep six month of living expenses in your emergency savings account.
Understand your health insurance options. During a divorce, you may still have health insurance, but if you’re faced with paying for your own insurance after the divorce is final, you should start shopping around, and saving for premiums.
Understand the family finances. Be knowledgeable about what your husband earns, what the household bills are and the balances in savings, checking and retirement accounts. Even if you’re not contemplating a divorce, you should be aware and involved.
Know where the legal and tax documents are kept. Know what the passwords are for online accounts. You may want to periodically check the balances in the accounts and make note of any discrepancies or rapidly depleting balances with your spouse.
Enjoying Your Marriage Does Not Mean You Can't Empower Yourself
We work with women to help them define their financial goals. It starts by identifying values and creating a financial plan and budget that is aligned with those values. It is something that can benefit all women whether there is a divorce in your future or not.