Tips on Handling the Financial Repercussions of a Divorce

It is a sad-nut-true fact that more than half of all marriages in the United States will eventually end in divorce. And, a divorce can have major financial repercussions, especially if you have become accustomed to relying on your spouse to do his or her part in managing your combined finances. Therefore, you must prepare yourself accordingly.

The first step is to consider signing a 'prenuptial agreement' before entering into a marriage. This handy document will determine the distribution of assets in case a divorce is sought. This, in turn, gives you a clear perception of what may potentially happen to you financially if your marriage does dissolve.

Once you do confront a divorce, then you must begin making wiser decisions in regards to spending money. Furthermore, you may need to consult with an experienced financial advisor. To help you along the way, please also keep these tips in mind:

Do Not Pursue Vengeance
Do not use money or credit cards as a weapon against your ex-spouse. If you use a joint account to charge a lot of money, you may end up having to pay the entire bill, especially if your spouse can prove that you did it out of spite.

Get Rid of Joint Accounts
Immediately terminate any joint accounts with your ex-spouse. Now that you are divorced and separated, there is no need to share in expenses or wealth.

Get a New Account
An important step to take after divorce is to establish your own separate financial identity. So after dismantling any joint accounts, contact your bank and credit card companies to request new accounts and cards in just your name.

Take Legal Action
If your joint account was in debt, the creditor may come after you for the money. Unless you take legal action to prove that you are not responsible for the debt, you may end up paying for expenses that were not your own.

Save Money
During your divorce, you may have to fork over a hefty stack of cash for legal expenses and moving fees. Avoid taking out any new loans to handle these fees. Worse case scenario, ask for an extension or help from friends. It is never a good idea to amass new debt immediately after undergoing a divorce.

Do Not Base Your Finances on Your Spouse
If you will be receiving either alimony or child support, do not factor these into your financial situation. It is better to base your bills and living arrangements on your own money instead. Only factor in the extra money once you have successfully developed a budget based on your own income.