Three Ways to Protect Your Finances in a Divorce


Calling a spade a spade and deciding to end a marriage is a difficult and often heartbreaking decision. Unfortunately, coming to that decision might be the easy part of the process, as even amicable divorces can get messy during the division of assets stage.

Indeed, getting through a divorce without accumulating any debt is a feat, but it’s the prize you’ll want to keep your eye on as you go through the stressful steps toward divorce finalization. The more you do to protect your finances during the divorce, the better a position you’ll be in to move on with your life once your marriage is officially legally over. Keep these three strategies in mind to safeguard your cash.

  1. Get out of the “joint” mindset: Most married couples share everything, from leases to utility bills to bank accounts. You might have to wait until the divorce is finalized to untangle your leases, deeds, and bills, but you can start getting out of the “joint” mindset right now by making yourself as financially “single” as possible. Close your joint bank accounts or credit cards that you share with your spouse. Remove your spouse as an authorized user from your accounts. In short, do everything you can to separate your finances from your spouse’s finances and vice versa. It might seem like a drastic step, which is why some couples tend to wait too long to do it: they are holding out hope for reconciliation. However, even if reconciliation is on the table, it’s a good idea to start safeguarding your finances in case it’s not. The best way to do that is to make your accounts your accounts only.
  2. Hold off on any major purchases (if possible): With a divorce pending, you probably won’t be able to avoid spending money entirely. Someone is going to have to move out, rent an apartment, buy furniture, or deal with other disruptions to his or her normal routine. It’s tough to deal with those disruptions if you can’t spend money. However, being sparing with your spending is a smart plan. Particularly if you’ve been married for a long time, you are probably used to living in a two-income household. When you get divorced, barring the presence of a new partner in the picture, you will have to make the transition back one income. That fact, along with the inevitable changes in your living situation, is going to change the way to budget your monthly spending.Needless to say, it’s a good idea to avoid any major or non-essential purchases until you get accustomed to your single-budget lifestyle.
  3. Check your credit report: Checking your credit report during a divorce is important for multiple reasons. First of all, your credit report will tell you which accounts or lines of credit are open in your name. You can see which accounts are open in your name and which accounts you share with your spouse, as well as which accounts list your spouse as an authorized user. You can also see accounts you might have forgotten about. All three discoveries can help you with the process of disentangling your finances from those of your spouse. It’s also a good idea to monitor your credit if your divorce is not amicable. Your spouse might still know your account numbers, passwords, or Social Security Number, or might still be using credit cards that lead back to your accounts. Monitoring your credit can help you stop your spouse from taking a hatchet to your credit.

These three strategies will help you keep control of your finances during a divorce and give you a better chance of coming out on the other end without debt or dreadful credit. In addition to following these tips, however, it’s in your best interest to consult a divorce lawyer early on in the process. Your divorce attorney will give you additional strategies for finance and credit protection and will fight on your behalf to safeguard your assets—both monetary and non-monetary.

photo credit: A couple of turkeys via photopin (license)

One Response to “Three Ways to Protect Your Finances in a Divorce”

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  1. Laurie says:

    You make a great point with #3. Your credit report is an important one to check especially if your divorce is not a friendly one. The potential is there for your soon to be spouse to damage your credit in many different ways, so you would want to keep an eye on that. Thanks for sharing.

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