A divorcing couple has numerous factors to focus on as they navigate the process. From property division and debt responsibility to parenting plans and spousal support, several compromises must be reached. Unfortunately, many couples focus only on the present to quickly and efficiently complete the divorce without considering the future financial ramifications of the end of the marriage.
Here are seven financial tips that you should keep in mind after your divorce:
- Cancel joint accounts: If this didn’t happen during the divorce process, it needs to happen immediately after. Even if your ex-spouse has accepted debt responsibility for a shared account, you are still liable if he or she defaults on the repayment.
- Update your beneficiaries: Whether it is an IRA, 401(k) or life insurance policy, it is crucial that you update your beneficiaries to reflect your current wishes.
- Build an emergency fund: Many individuals become accustomed to the dual income and buying power of the marriage. Unfortunately, the newly-single might have trouble overcoming medical emergencies, home repairs or job loss. Having a strong economic safety net is important.
- Check your credit score: If you can afford to get reports from all three credit bureaus, it is wise to do so. These reports can help you identify errors, open-but-forgotten accounts and shared accounts you have yet to close.
- Develop a new estate plan: Similar to updating your beneficiaries, your estate plan likely lists your ex-spouse as an heir. Also, your ex was likely granted power of attorney over either financial or medical decisions should you become incapacitated.
- Build a strong budget: Once the divorce is finalized and you have a clear picture of your newly-independent finances, it is wise to create a realistic, effective budget for yourself and your new household.
- Delete personal information and change shared passwords: If you and your ex-spouse shared a computer or login data for social media sites and digital assets, it is wise to clean that all up. You can run various programs to clear your personal information from a computer. Also, take the time to remove your ex and change online login information.
When proceeding through a divorce, it is wise to keep an eye on present-day issues while also remembering the steps you need to take to secure your financial future. Do not hesitate to discuss your concerns with a skilled legal professional.