How to Manage Your Finances After a Divorce
Divorce can be emotionally devastating, but it’s just as likely you’ll suffer some financial setbacks, too. The longer you’ve been married, the more assets and accounts you’ll need to divide. One way to go about this is to discuss your options with your financial advisor. If you don’t have one or you just want to prepare yourself for the tasks ahead, here’s a guide to managing and rebuilding your finances after a divorce:
- Get rid of your joint accounts: During your separation, you should divide the joint accounts by agreement (often, a 50/50 division is preferable, but in some cases one spouse might get more). Once the money is divided, close all joint accounts. If you don’t, both of you are legally entitled to the full amount in a joint account, and either spouse can drain it.
- Open new accounts: Once you are living separately, it’s smart to open new accounts—especially if your former spouse has access to the old ones. This is also a good way to keep your pre- and post-divorce finances separate, so there’s no question about what to divide.
- Create a cash safety net: Divorce can take a heavy financial toll, so your main goal should be to start creating a cash safety net. You need to be able to access at least six months’ worth of living expenses, should something happen to your job or your health. With any luck, your share of the assets will contribute to this safety net.
- Know your credit score: Rebuilding your finances after a divorce in Atlanta, GA can also mean bringing your credit score back up. Check your credit score with your bank or the credit reporting agencies to ensure no one has opened up any new accounts in your name.
- Change your beneficiaries: Unless you want your ex-spouse to receive money and property upon your death, change your bank account, retirement, life insurance and other beneficiaries right away. Otherwise, if something were to happen, they’d receive the benefits as your named beneficiary—even if you’re no longer married.
- Go over your investments: Next, go over your investments with your financial advisor. See if there’s anything you need to do or shuffle around to maximize your investments and minimize your tax liability.
- Create a new budget: A new living situation demands a new budget, which should take into account any spousal or child support you’re paying, new rents or mortgages and more. Proper budgeting is the key to improving your credit score and your overall financial situation following a divorce or any other life-changing event. Start your budget here.
- Consider new credit cards: Finally, consider opening new credit card accounts. Many people need a “bridge” as they get back on their feet, and credit cards can provide that assistance. Just make sure to factor it into your budget, including interest rates. Click here to see the benefits of our Visa Credit Card.
For more information about managing your finances after divorce in Atlanta, GA, or for help with opening new accounts, get in touch with the team at Emory Alliance Credit Union today.
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