Divorce isn’t easy on your heart, and it certainly isn’t easy on your wallet. You lose assets, you might have to relocate, you’re down to one income and all of it can be expensive. A typical divorce in New Jersey costs somewhere between $12,500 to $14,500.
Many people wind up on dangerous financial footing after divorce, particularly if they haven’t properly planned or reached workable solutions to things like child custody and spousal support. The thought of rebuilding your finances post-NJ divorce can feel as daunting as the divorce itself.
As our East Brunswick divorce lawyers know, there are several ways to boost your bankroll after a split, but it’s a smart idea to begin the planning before the divorce is final.
Planning for Post-Divorce
Part of the whole divorce process involves planning for what comes next. Working with an experienced divorce lawyer will help you make the most of this.
This means you’ll want to identify/clarify all your assets, investments and debts. Know how much money there is and where it is. Note whose name is on the account. At the end of the day, the judge is likely to care less about betrayal or lost love between you and more about the basic dollars and cents of your collective financial situation.
Once you have all your financial records, make copies. Don’t rely on electronic copies. Keep your own separate files that you can easily access.
You will also want to consider proactively setting up a separate account in your name to move just enough assets that you’ll have some liquidity to stay afloat if your spouse decides to clear your joint account (which unfortunately does happen). This is not about depriving your spouse of anything, and you do so with the understanding you may need to pay some or all of it back. But what you’re doing is making sure you have enough cash to cover the bills until attorneys can get involved. This allows you to avoid late charges, going into debt or requesting an emergency hearing to address the situation if your spouse does empty the joint accounts once you announce your intention.
You may consider at this stage working not only with a divorce lawyer but a financial advisor, someone who can help you arrange your finances in a way that puts you in the most advantageous position possible.
Lastly, once the divorce is final, make a clean break. Close your joint accounts. Take your name off any registrations, titles or deeds that now belong to your spouse. If you’re on any loans, be sure your former spouse refinances so that your name is removed.
Steps After Divorce
Once the divorce is complete, you will need to lay out a budget. If you haven’t already, hiring a financial advisor is a smart move. It’s important to carefully analyze your cost of living and make sure you aren’t overspending.
If you aren’t great at keeping track of what you spend, how much you have and what you need, there are numerous apps you can download that help with this. Some just track the money you’re earning, spending and saving, but others can help you invest, reduce costs and more.
One of the best things you can do to help recoup your losses after divorce is to formulate a plan to save. Having long-term and short-term saving goals are important. Ideally, you will have at least three-to-six-months worth of income stashed away, just in case. Not everyone can meet that, but it’s a good goal.
Another important element of getting back on your financial feet is to establish credit. Your divorce probably dinged your credit. Keep an eye on your score and work on building it up again incrementally. This is going to help you when it comes to renting an apartment or securing a car loan or buying a new home. In some cases, it even impacts your job opportunities, so best to be mindful of your score and do what you can to bring it up. Pay your bills on time. Don’t slip on your support payments. Try not to carry unnecessary debt.
Note that just because the marriage is over and certain debts are assigned to your spouse, that doesn’t mean you aren’t legally liable to those financial institutions if your former spouse slips. Ask your attorney how you can minimize that risk.
Although rebuilding your finances after a divorce can seem intimidating, with planning, discipline and some financial help, it is possible.
Contact our East Brunswick divorce attorneys today at (732) 810-0034 to schedule an appointment.