When divorce is inevitable, you must start to consider your finances. One of the biggest hurdles for couples is to split assets and debts during the divorce process.
Nerdwallet provides tips on how to prepare your finances ahead of your divorce.
Financial documents are the best evidence of the state of your financial health. Gather all documentation, including:
You should begin gathering documents as quickly as possible when you know that a divorce is in your future.
If you are sure that divorce is on the horizon, then you need to begin tracking your household’s budget and expenses. Later, the court can use the log as a tool to determine how to split child or spousal support and how to divide debts and assets.
While monthly expenses are critical elements of the log, do not forget other expenses. For example, the cost of a holiday trip or one-time expenses such as replacing kitchen appliances.
When it comes to spending, transparency is important. Do not try to hide purchases or withdrawals from your spouse. If it appears that you are emptying accounts or dipping into funds more than before, your spouse might use it against you in court.
Continue to use your accounts like you did before. You can set aside money for divorce expenses but try to spend a comparable amount to your spouse.
While finances in a divorce can be difficult to untangle, budgeting can make it easier.