Getting a divorce is as budget-breaking as it is heart-wrenching, but while a divorce changes your marital status, it doesn’t change who you are or what you’re capable of. Here are some tips to take control of your financial future that will help you put your emotions aside and take charge of your life.
- Pull your credit reports
You are entitled to a free credit report from each of the three credit reporting agencies (Equifax, Experian, and TransUnion) once every 12 months. These show all credit accounts that exist in your name alone and jointly with someone else. Your credit score can be damaged if a spouse or ex-spouse fails to pay joint bills.
- Try to work with your ex
Continue to use your accounts— individual or joint — as usual. If you don’t have money set aside for hiring a divorce attorney and other related expenses, try to agree with your spouse about each of you spending a conservative and comparable amount. If your relationship isn’t amicable, ask your attorney about a legal separation, which would dictate how you both use money until the divorce is finalized.
- Don’t forget health insurance
Health insurance could be a substantial expense if you used to be on your spouse’s policy. COBRA is an option but an expensive one, and it lasts for only 36 months, so begin to look for your own policy even before you’re divorced. Open enrollment for health insurance doesn’t begin again until the end of the year, but since a change in health coverage stemming from a divorce is a qualifying life event. you’re likely eligible for a plan under a Special Enrollment Period.
- Make a budget and a financial plan
To live on a diminished income, you’ll need to know how to budget. Don’t forget to plan for college tuition, child care, children’s lessons, sports and activities, and your own retirement, taxes, transportation and housing. If your divorce settlement will include lump sums from property sales, alimony, pension rollovers or selling other assets, hire a fee-only financial planner to help make a plan for managing the money.