Anyone going through a divorce likely deals with tremendous stress, but the complexities associated with dissolving a marriage don’t absolve anyone from their decisions. Regarding financial matters, staying focused and avoiding mistakes is a must, even when dealing with all the responsibilities divorce brings.
Steps to consider when divorcing
Seeing the complete picture of a financial situation could help someone make appropriate decisions during a divorce. Knowing all assets and liabilities is important. Assets come in both joint and individual accounts, and they could include cash, stocks, real estate, retirement accounts and more.
Liabilities may include various loans and credit accounts as well as tax obligations. Debts owed detract from net worth, and both spouses may be legally obliged to pay the debts. Settlement negotiations might involve “turning over” some debts to one spouse.
Obligations also take the form of current expenses, such as rent, food, education, child care and more. Currents earnings might not be enough to pay for these costs, so a spouse may ask for child support and alimony. However, reassessing a budget and eliminating unnecessary expenses could make things less financially challenging.
Weighing other financial and budget concerns
Health care, both for oneself and any dependents, could be enormously expensive. Insurance helps reduce potential costs, so a spouse may need to budget for monthly premiums. Other monthly insurance bills may involve car, renter’s, homeowner and excess liability insurance. While premiums detract from a budget, they could save someone from financial ruin.
Even with an equitable settlement and helpful child or spousal support payments, life may remain a financial struggle for one or both spouses after splitting up. Carefully addressing financial matters and eliminating unnecessary expenses could help an individual set a better course for life after divorce.