When you get married, the idea of divorce rarely crosses your mind. Unfortunately, happily ever after is not always the ending to a love story. When it comes time to heal your heart and determine the next chapter of your life, contemplating your finances can make an already painful situation even more stressful and challenging. In addition to finding your footing in practical and emotional ways as a single person, you’ll have to consider how you will pay your bills moving forward, as well as what you are financially obliged to cover or entitled to claim from the divorce. With all the many moving pieces that accompany a divorce, it’s hard to know what to focus on. Today we will look at the top four vital strategies to overcome financial stress during your divorce.
Separate debt to financially protect yourself
Credit card and loan companies do not care about your divorce. They just want to collect on their unpaid debt. Unless you can leave your marriage with zero debt, you and your soon to be ex will be held liable for any debt that has been racked up on your jointly held accounts. Once you have both made the decision to divorce, be sure to cancel any joint accounts. In many cases, you can split the debt into two accounts to focus on paying your portion of the debt only. It’s important to avoid keeping joint cards, even with a verbal agreement to pay, because if your ex-spouse decides to bail on the payments, you will be left holding the bag. All these steps are useful to take, when applicable, before you go down the legal route. Once you involve a lawyer, it becomes incredibly expensive to navigate the separation of finances.
Separate joint savings and joint bank accounts before you start the divorce process.
Divorces rarely take place overnight, and when a divorce is contested it can become delayed by months or even years. It’s essential that during this time you have access to a steady and reliable revenue stream, as any settlement or maintenance payment will not, for the most part, happen until the divorce is settled. Start by separating your joint current accounts and joint saving accounts so you both have equal shares in individual accounts under your own name. This will ensure your revenue stream is protected while the divorce lawyers work out the nitty gritty financial details of your divorce.
Comb through your assets
Separating assets is an important aspect to navigating your divorce. Most jurisdictions worldwide now work on the basis of “Marital Assets.” Ultimately, this means all assets in the marriage, regardless of whose name they are in, are shared and should be divided 50/50 in a divorce. Some jurisdictions still operate on the basis that any assets in your name are 100% yours and what is in your spouse’s name is 100% theirs. Thus, there is no division of assets. Before you apply for your divorce, be sure to understand how your jurisdiction handles division assets. We are happy to help you with this guidance.
Regardless of which rule applies, it’s important you gain a thorough and accurate understanding of what is either yours or is marital assets. Make a line-by-line list of all assets, such as bank accounts, real estate properties, cars, jewellery, investments, etc. This will help you and your legal team to have a full understanding of what each party is entitled to during your divorce.
Know the cost of living for you and your children
Part of the financial divorce process is to know what it is you will need to either pay or to receive to account for cost of living. It’s surprising how many parents do not know the monthly cost of their children. In any divorce, the current standard of living of the children should be maintained, so it is important to know what this standard is in financial terms.
If you have not done so already, have a financial monthly tracker (there are many apps available for this) to track every expense your children cost. From food to entertainment and schooling to technology, be sure to account for all their needs. Remember that children get more expensive as they grow older, and you need to take this into consideration. For example, if your children are very young and not yet at school, factor in their future educational costs as they grow up and become more financially demanding. So many people come to us here at One Life Coaching asking for help determining what they are entitled to. However, the better question is “what is it that I need for my children to continue with a similar standard of living.” Also, conducting a hands-on cash flow analysis will provide you with a sense of control over your financial situation. Be sure to account for your recurring expenses such as rent, utilities, and phone payment.
Divorce support with One Life Coaching
At One Life Coaching, we recognize how emotionally challenging the divorce process and life after divorce can be – especially in the case of expats, living abroad, without their trusted support network. Whether you need help navigating the challenges of your marital split, struggling during the division of assets, or adjusting to life finally as a single person, the professionals at One Life Coaching can help.
With over a decade’s experience helping people navigate their divorce, we take great pride in having provided hundreds of clients in the UAE and internationally the tools to navigate their divorce and regain their self-esteem so that they embark on this new chapter of life fully equipped for success.
When you are ready, please contact a member of our team. We are here for you.