Unavoidable changes to your finances occur during divorce. However, the decisions you make can have a significant impact on your financial health in the future.
As explained by U.S. News & World Report, divorce impacts everything from taxes to household income. Here are a few steps you can take to ensure you move to the next phase of your life with confidence.
Perform a financial accounting
Make a list of all the assets you and your ex-spouse own separately. Next, list the assets you own jointly, such as your home or bank accounts you share. Once you have a reasonable figure in mind, consider how much debt exists between you. Keep in mind that you and your soon-to-be-ex not only share in assets, but you are also responsible for paying any remaining debt you share, even though you are not together.
Compare homeownership to finding a new place
Your family home is much more than just a financial investment. But that aspect is crucial when going forward. While you probably want to remain in the home you worked so hard to build, consider the costs of that decision. Along with mortgage payments and maintenance costs, you must also pay taxes on the property.
If these costs are too much for you to handle on your own, consider selling the property and using the money to secure a new living arrangement. While it is emotionally trying, selling a home makes better financial sense for many divorcing couples.
Make a plan for healthcare costs
If you received insurance through your ex’s employer, coverage would cease once you become divorced. If you cannot secure insurance through your own employer or served as a stay-at-home parent for the duration of your marriage, it is worth negotiating within the divorce agreement. Some spouses allow an exchange of assets to ensure you can afford healthcare costs after the split.
Even so-called amicable divorces entail a fair amount of stress and worry. By entering the process prepared, you will have one less thing to worry about.