In their haste to file for divorce, many people in Kentucky fail to realize that their financial situations are going to change. Whether they plan to get custody of their kids or move into separate households, careful consideration and planning should occur to minimize the impact of their separations on their finances. Both parties in a divorce are often hit hard by the financial challenges it can present, states MoneyCrashers.com.
Divorces are usually financially devastating when couples have been together for many years and are much older. Having to separate living expenses and assets can be stressful and lead to all sorts of conflict during divorce. Couples who take the time to prepare themselves financially for their new independence can improve their post-divorce finances.
Get finances in order
According to GWGLife.com, separating spouses should focus on having very little debt, a place to stay, retirement assets and cash. They should establish a plan that enables them to pay off as much joint debt as possible. Divorce does not stop creditors from pursuing payment on joint accounts. They should close all joint accounts that do not have balances to prevent issues in the future. Separating spouses should also check their credit reports for inaccuracies and try to resolve them before their separations are finalized.
Create a post-divorce budget
Individuals should reevaluate their budgets and make news ones that accurately reflect their post-divorce situations. They should include all expenses, including transportation and health insurance. Once they determine how much income they need to support their new households, they can take measures to ensure that they do not struggle. When calculating their income, they should include any child support and alimony payments they may receive. Separating partners should also save some money each month for emergency funds.
The financial impact of divorce can be a rude awakening for many people. Individuals who prepare before they file can lessen the blow to improve their post-divorce outcomes.