How Can I Remain Financially Stable After a Divorce?

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Every day, thousands of people stay in unhappy marriages due to a fear of the unknown. For many of these people, the fear is centered around money.

“How will I support myself/my kids?”

“Can I afford to keep my home without my spouse’s income?”

“Will I have to pay child support and/or alimony?”

“Am I entitled to receive child support and/or alimony?”

“Where will I go if I have to move?”

“Do I make enough money to pay all of my bills on my own?”

These questions are all valid concerns, but the good news is that they are all solvable. While it’s unfortunate that your marriage didn’t survive, it is possible to make your finances work if you decide to divorce.

  1. Start planning for the divorce before you even separate. Get familiar with exactly how much money you would need to make in order to pay all of your expenses on your own. Stop any unnecessary spending immediately and put that money aside for later (See #2 below.)
  2. Open a checking account in your name only. Deposit as much money into this account as you possibly can before and during your separation. If you and your spouse have a significant amount of money in a joint checking account, be advised that you can legally withdraw up to one half of the total amount as long as you do it before the divorce is finalized.
  3. Don’t be in a hurry to finalize your divorce. Understandably, you may be anxious to just ‘get it over with‘ already. However, this mentality can cause you to rush through the negotiation phase, putting your financial security at risk. Take the time to go through and make copies of all important paperwork, like credit card and bank account statements (checking and savings), tax documents, any and all retirement/pension information, stocks and/or mutual fund statements and anything else that is relevant to your finances. Make sure you have a solid understanding of all of the assets and debts acquired during the marriage.
  4. Stay insured. If you (and any children you may have from the marriage) are currently covered by your spouse’s health insurance plan, be aware that as soon as your divorce becomes final, you will lose those health benefits. Ensure that your children will continue to have coverage under your spouse’s plan, and acquire health insurance coverage on your own.
  5. Apply for a credit card in your name only. If you don’t already have one, you should look into getting a credit card with only your name on it. Use it only for emergencies and pay the balance each month. This will help establish a good credit history for you without your spouse’s help. It is also good to have at a time such as divorce to cover unforeseen expenses.
  6. Get a copy of your credit report and a copy of your spouse’s, too. Doing so can give you a lot of insight into not only your own finances, but any that your spouse may have been less than forthright about. It’s also a good idea to keep an extra close eye on your credit report and score as you go through the divorce process. You’ll need to be credit worthy when all is said and done, because you will no longer be financially tied to your spouse.

Keep in mind that you will be much happier at the end of your divorce proceedings if you take the time NOW to set up a solid financial plan and put it into action.

Image credit: Alan Cleaver

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7 Responses to How Can I Remain Financially Stable After a Divorce?

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