Jul 3, 2012

How to Manage Your Finances After a Divorce?

During marriage, there are many joint projects, which from the economic point of view are considered as income, expenses, debts and savings shares. When you have decided to dissolve the marriage, you need to rethink your financial situation and bring it back to the individual level.

The first step is to analyze your personal situation and identify your financial strengths. That is, how high your income and if you have savings or property.

The second step is to define the average amount of your expenses and which ones will be shared. For example: child support or some common debt. From this information, you must set a monthly budget that allows you to independently meet your needs. This allows you to plan and set new goals to achieve.

Before starting the divorce process, consider the following:

Attorney fees and legal advice - Since divorce is a legal proceeding, you will require counseling and representation by an professional attorney. Consult with various professionals, for their rates and services offered by them. Before hiring, ask them to explain what is the process, how long it takes on average and what activities will be involved.

Distribution of goods - The distribution of goods depend on the regime under which you are married. Gather all the documents certifying the information, such as marriage proof, property deeds, bills and all that confirm the property of your belongings.

Documents - The legal process will require the submission of many documents. Make sure you have everything in order. If you lack a role, consider the cost of processing and the time you must invest to get it.

Joint bank accounts - The money that exists in joint bank accounts should also be considered as an asset to be distributed. Once decided, go the bank to clarify the new status of the account, whether that will be dis-enrolled or on behalf of one person.

Extensions of credit cards or memberships stores - It is the same case of joint accounts, you must decide whether to continue with this scheme or if to cancel the extensions.

Shared Services – Consider services shared together with your partner for example, membership of the club or gym. You can probably keep them separately, investigating whether it will generate an additional fee.

How to Manage Your Finances After a Divorce?

The new administration will take time to reset your budgets in the short, medium and long term. Here are some considerations to start the new financial stage of your life:

Notes - Take a notebook and say everything about your income, expenses and debts. It is important to mark a starting point clearly indicating what bills and what you need. Set a realistic plan of how you will achieve your goals.

Prioritize - Make a list of everything you need. Identify what are real needs and what are your tastes or desires. You will be surprised to discover that many things were acquired tastes, objects or services that you do not really need, but your partner liked. Give priority to whatever is necessary to live decently.

Budget - Knowing how much you have and what you need, you can set your monthly budget. It is likely that initially most of it goes to expenses. With discipline, soon you can achieve rebalance your financial situation.

Protect your credit - If you build or strengthen your heritage, consider the credit as an alternative to purchase durable goods and property. Make sure you pay on your credit card bills or other debt on time avoiding the payment of fees or penalties. Improve your credit history, which will give wider access to your credit.

Save - Always allocates a percentage of your budget for savings. At first it might be a smaller percentage, but you must commit to increase it as time goes on. This amount will allow you to deal with any unexpected solvency in medium and long term and you can destine to larger projects.

Remember that the best alternative arrangements are disputes. If they can agree how to divide property, both will benefit from a shorter procedure and quiet. To protect your heritage, it is good to have all agreements in writing.

To improve your financial awareness, try to see this process as a restructuring. It is true that you should let go of certain things and initially need to invest to recover some assets. However, it will also reduce costs and debt. You just have to regroup to adapt this new lifestyle

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