If you’re in the process of a divorce, you might be worried about how your finances will fare during the legal proceedings and after the divorce is finalised. Being financially independent once again can be a scary prospect, but it can also give you greater freedom long-term. Start your post-divorce finances in the black by following these financial tips:
1) Open your own accounts straight away.
Any joint bank accounts, investments, or mutual assets you share with your husband will be divided up by court ruling, and may not be accessible to you during the legal proceedings. This can put you in a financial pinch, so make sure to open a personal banking account straight away where you can deposit earnings and withdrawal money with no hassle. Make sure to disclose your finances with your solicitor, though, as they are an important part of the legal proceedings.
2) Cut back on litigation fees.
Speaking of your solicitor, his/her divorce fee for billable hours can add up to a small fortune if you’re not careful. Keep a list of questions to ask your solicitor at your next meeting rather than calling with every question you have, and offer to do some of the work yourself—putting together financial records, making copies, etc.
3) Clear bad debt and build up your credit.
If your spouse is awarded the house, the car, or any other source of debt the two of you shared, make sure your name is removed from the loan so that you are no longer responsible for repaying the debt. Conversely, if you are awarded these assets, you might look into remortgaging your home or debt consolidation to help you get your finances back on track. Taking out a credit card in your own name can be a good way to rebuild credit as long as you are responsible with the card and pay off your debts before they start accumulating interest.
4) Sell what you don’t need.
Once a settlement has been reached between you and your spouse regarding your mutual assets, you may consider selling some of the items you have been awarded. This could be anything from furniture or small appliances you no longer need to downsizing into a smaller house with less costly mortgage payments and utilities. You should put whatever earnings you do make toward your outstanding debts or into a savings account to help get your finances back on track.
5) Set long-term financial goals.
Setting financial goals for yourself and any children you have is important to maintaining long-term financial stability. Make a list of your total monthly income (job, child maintenance payments, etc.) and expenses (mortgage payments, food, utilities, transportation, etc.) and establish a budget around it. If you have leftover money at the end of the month, open up a cash ISA or consider investing in a government bond to help maximise your long-term savings.
