Regardless of your role in your marriage — be it breadwinner, co-contributor or dependent — it is important that you take steps to establish financial independence as soon after you decide to file for divorce as possible. There are several key steps you can take to do this.
PolicyGenius details three key steps you need to take to establish financial independence sooner rather than later. The purpose of these steps is to protect your future finances and move you toward financial security on your own.
Open your own accounts
The truth is that law limits just how much you can legally separate your finances from your spouse’s before a judge creates an order. Though you should consult with an attorney before changing anything, it may be wise to create an emergency savings account in your name; open your own checking account and reroute your direct deposit, and establish your own insurance policies. Let your spouse know that you are taking these steps and that he or she is welcome to do the same to avoid potentially harmful future accusations.
Create a budget
Divorce is expensive, and it will continue to be so long after the judge hands down the final decree. Create a budget early on that reflects your new financial reality. Identify all your sources of current and future income and estimate future expenses. You are likely to discover that while your income goes down, your expenses will either stay the same or increase. What this means is that you will need to identify areas where you can cut back or pinpoint expenses you can eliminate entirely.
Work on your credit
If you always relied on your spouse’s credit for things like mortgages, car loans and personal loans, one of the best things you can do for your future financial security is to begin building your credit. You will need credit in your new life, whether for renting an apartment, buying a new car or going back to school. Start now, before you are officially on your own, to establish a good and solid credit history.
Though will eventually need to establish financial independence in divorce, you do not want to make any mistakes that could compromise your case. Consult with a lawyer early on about what you can and cannot do to move toward financial security.
