Don't Let Your Divorce Wreck Your Financial Future
Updated: Sep 24, 2021
Written by: Jolisa Webb, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
Divorce can be devastating, both emotionally and financially. It's a delicate time that can easily result in poor decision-making, especially if you feel overwhelmed by the overall process. And since many of these decisions can have a long-lasting impact on your financial health, it is essential to choose wisely. Being intentional and making sound decisions can prevent any additional insult to injury and shorten the time it takes to recover financially. Follow these strategies to get your finances in order as soon as practicable during the divorce process.
First, make and take the time to open your own bank account and close any joint accounts. You don't want to be stuck with any financial liabilities your soon-to-be-ex creates. This doesn't just include bank accounts. Any credit cards are also potential nightmares. Contact your bank and credit card companies and explain the situation and open new accounts in your name only. This might be easier to do before closing the joint accounts to ensure that you'll have access to money throughout the divorce process.
Next, consider your housing situation. This is often one of the most emotionally challenging decisions you will have to make. It can be immensely complicated by the presence of children. When children are part of the picture, it's best to consult with an attorney to examine your options. On the other hand, if children are not involved or your will soon be an Empty Nester, do you really need all that house? In addition to the mortgage, remember to factor in the utilities, maintenance, lawn care. Notwithstanding nostalgia, it's often more prudent to sell the home and move on in the long run.
In addition to the home, take an inventory of all your other assets. Do you know the full extent of your financial holdings during your marriage? In many cases, one spouse handles the financial matters, and the other is happy to stay out of it. This is nothing to feel ashamed about or beat yourself up about. We all have our strengths, and if this came more naturally to your husband than you, it's called a partnership.
However, now that the partnership is dissolving, it's time for you to get smarter and develop an accurate picture of what you have. You might be surprised by what you discover. Still, this knowledge is crucial since you must collectively decide how to handle the assets. Do you split them? Sell them and split the proceeds? Or hire a lawyer and battle it out? Be sure to obtain a current copy of your credit report so you know where you stand financially. Your spouse may have opened a joint account or credit card without your knowledge. Additionally, if you get the feeling your soon-to-be ex might be hiding assets, consider hiring a forensic accountant.
Now is also the time to look at all your insurance needs. You might need to get on your own medical insurance plan. What items do you still own that need to be insured? Your insurance costs might be much less now. There's no reason to carry more insurance than you need. Your situation has changed, so your insurance needs have likely changed as well. Make changing your will and the beneficiaries on your life insurance and retirement accounts a top priority.
For some reason, this step is often overlooked. And yet, there's a good chance that your beneficiary was your spouse, so you'll probably want to list new beneficiaries. For most accounts, this is easily accomplished by filling out a simple form. Ensure that, in the event of your death, your assets go to those you want to have them.
Don't forget to create a new budget. It is very likely your income and expenses have changed, so it only makes sense that your budget will change too. If you've gone from a two-income household to a single income, there's likely less margin for error.
Create a budget that makes sense for your new circumstances. This can also be another very emotional exercise, and to be clear, I feel your pain. I love a killer handbag or stilettos as much as anyone, but this is the time to be clear about needs versus nice-to-haves.
Bottom line: Divorce is a process that will likely represent a significant change in your life. It can affect everything, from how you manage your schedule to who you call if your car breaks down. Navigating the divorce process can be incredibly challenging if financial matters are not handled intelligently. Think you can't afford to hire anyone other than a lawyer?
Think again.
That is why one of the last strategies I recommend is that you hire and regularly consult with a team of professionals who can help you. In fact, hiring other experts to support you, like a CPA, mediator, and especially a divorce coach, will save you time, money, and energy. It is often the cumulative list of a lot of little things that can increase stress during and after divorce as you seek to move forward with life. Working with a team of experts can help you arrive at financial decisions which alleviate a lot of this stress and expedite the time it takes you to heal and move forward in a way that aligns with your best self.
Jolisa Webb, Executive Contributor Brainz Magazine
Jolisa Webb is a CDC Certified Divorce Coach ® and the owner of Beauty in the Midst, LLC, a woman and Veteran-owned small business company. Beauty in the Midst DBA Divorce Coach Confidante is rooted in healing presence and holistic, action- and outcome-focused philosophies.
As a divorced mother, a retired and highly decorated Air Force Lieutenant Colonel, and an executive leader, she knows first-hand what the divorce experience can feel like both personally and professionally. With a career spanning the globe, Jolisa has over 30 years of executive, analytical, and leadership expertise in strategic human resources management, with demonstrated success in command and control, communications, information management, personnel, training, protocol, and military equal opportunity.
As a result of her own lessons learned, she became a divorce coach to help female Veterans and other professional women who might be thinking about divorce, in the midst of a divorce, or struggling to move on in the aftermath of a divorce. Jolisa understands how lonely and overwhelming the divorce process can be no matter how intelligent, accomplished, strong and beautiful a woman is. No matter where they are in the divorce process, her Signature Packages are designed to help her clients think and make decisions in a way that honors their truth.
