Divorced or Not – Financial Knowledge Every Woman Should Know
When Sir Francis Bacon wrote “Knowledge is power,” he could have been talking about women going through a divorce. Especially if he had said “financial knowledge.” Too often, women wish they had taken the time before divorce negotiations became a reality to get a better sense of their financial picture, including expenses, debt, and investments. That said, it’s never too late to take control of your financial situation. When you understand your finances, you can face divorce confidently and more accurately plan for the future.
All women -- whether happily married, contemplating divorce, or newly single -- can benefit from the following financial to-do list.
1. Determine How Much Money Is Coming In
This total will include your income, your spouse’s income, any investment income such as dividends, potential bonuses, tax refunds, monetary gifts, etc. Getting a total sum will help you determine how much could be yours to work with after the split.
2. Calculate Your Household Expenses
How much money goes toward housing, utilities, credit card bills, college funds, retirement savings, and other expenses? Your household expenses will change post-divorce, but it’s important to understand how your joint money is being spent now to understand what you’ll spend in the future.
3. Reconnect with Professionals
Ensure you have a relationship with your family’s accountant, estate attorney, insurance broker, and any other professionals you’ve employed jointly with your spouse. If divorce does happen, you may need information/advice from them. Your conversations with us (your financial firm) will be an essential touchstone as you weigh the division of financial assets.
4. Check Your Credit Reports
A divorce often means splitting assets such as your home, retirement accounts, and investments. In the process, you may find that you will need to refinance an existing mortgage, structure a new mortgage, apply for your own credit card, get a new auto loan, etc. Determining you have a solid credit rating ahead of time will help ensure you get the best rates and give you enough time to correct any errors.
5. Check Your Health Insurance
If you’re on your spouse’s employer-sponsored health insurance policy, call the benefits department or insurance carrier to determine how long your coverage will continue so you can make any change in a timely, cost-efficient way.
A solid understanding of your current financial picture can give you the confidence you need to make sound decisions during a divorce and throughout the rest of your life. As you navigate this major life milestone, call us if we can help in any way.
This material does not represent tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation.
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