Financially Preparing for Divorce

When your marriage is ending, you’re going to have a lot on your mind. How will you share custody of the children? Who will stay in the marital home? Should you tell your friends and family separately or together?

With so much upheaval, it’s easy to overlook your financial well-being. You’re transitioning from a two-income household to one. If you make less money than your spouse or you expect to be paying child support, having a plan in place will give you the best chance at financial stability once the divorce is official and your new life begins.

In this blog, we’ll share some tips that can help you prepare financially for divorce, so that you and your children have the resources you need to move forward.

Create a budget

Budgeting is the best solution for any financial challenge. List your income and necessary expenses, and see how they balance out. (Don’t forget to include temporary but significant costs, such as moving and first and last month’s rent on an apartment.) 

Although budgeting isn’t the most enjoyable exercise, it is a fundamental part of taking control over your finances. You’ll know where you stand, which gets rid of the uncertainty. You will also know what you need: if you’re in the red after deducting expenses from income, it may be time for a career change or, if you’ve been a stay-at-home parent, you may have to consider going back to work if the kids are in school.

Cut back on unnecessary expenses

Look at your variable expenses: eating out, shopping, movies, and after-work cocktails with colleagues. When your household income is reduced, these are the expenditures you need to look at and cut out, at least temporarily.

This is one of the areas where preparing financially for divorce is especially uncomfortable. You’re cutting out the things that you enjoy, and at a time when your mood is low and positive experiences are scarce. Rest assured, once the period of uncertainty has passed, you’ll be able to enjoy these things again.

Set up your own accounts

If you don’t have any financial accounts in your name only, it’s time to create them. Open a checking and savings account and apply for a credit card or line of credit. If your pay is currently being deposited into a joint account, provide updated information to your company’s payroll department as soon as possible.

If you’ve never had your own financial accounts, you’ll need them to start building a good credit history. You’ll be able to apply for your own mortgage, car loan, or apartment and receive favorable terms on credit cards.

Address joint accounts

Most couples share a bank account and even a credit card or line of credit. If your spouse doesn’t want to close them, have your name taken off of these accounts so that you are no longer responsible for any activity on them. In a contentious divorce, it is not unusual for one spouse to max out and default on a joint credit card to spite the other one. (Should this happen, let your attorney know right away, as you may be entitled to more marital property to compensate.)

Financial balance means freedom

Once you balance your income with your expenses and have your own accounts, you have control over your financial situation. You know what to expect, what your resources are, and can face the future with a clearer and calmer perspective.

Contact a California divorce attorney who can help

If you are facing divorce, don’t do it alone. The KL Family Law team will provide you with supportive and appropriate legal guidance that helps you leave your marriage with your financial stability intact. We’re here for you, so when you know you need a California divorce lawyer, call 714-372-2217 right away!

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KL Family Law

At KL Family Law, we understand that your primary concern is the well-being of your children. We strive to offer tailored solutions for your family law needs and help you move forward through this difficult transition.

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