We have all experienced the emotional toll of divorce, whether actually going through it or having undergone the ordeal through family or friends’ experiences.
In addition to the emotional situation, there is a financial cost that has to be considered. The first thing that any financial advisor will tell you is to create a budget.
This is the most important thing you can do and should be done as soon as the initial shock has diminished.
Contact a financial advisor to properly develop and stick to a revised budget for the financial complexities of a divorce that will likely be far greater than you initially anticipate.
Whether you are the one initiating the divorce or not, there are less obvious financial decisions that must be made in order to prepare your finances for divorce.
The foremost and most effective is to be frugal! Obviously, your spending will likely be curtailed, but you will need to stop spending on anything that isn’t absolutely required.
You will need to save as much as you can in the intervening time until the divorce is final.
Cost of breaking up
The cost of divorce is estimated to run about $15,000 to $20,000 per couple. This sum is never budgeted and will be needed for such items as attorney fees, court and mediation costs, and for other expenses that may not be foreseen.
First, eliminate any debt and extra payments, such as gym memberships to those morning coffees at the local coffee shop. These are small expenditures, but they will add up and allow you to bolster your savings as quickly as possible.
Then, determine which assets are in whose name. Prioritize which assets you want to keep and what is most important to you. Select your battles and be equitable with them.
A house will be the largest asset to come to an agreement, but the cars, art, investments, and life insurance must also be reviewed.
Next, you will need to have wills and insurance policies rewritten.
Finally, be prepared to sacrifice. You probably won’t emerge from the process with everything you want.
With a little planning and organization, however, you can ease your transition.