PerkStreet Financial

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1. Guard your budget like you’re guarding your heart.
Although it’s not in your best interests to keep your heart guarded forever, keeping your budget on lock-down is advisable, says Lisa C. Decker, a certified divorce financial analyst who has counseled hundreds of divorcees in and around the Metro Atlanta area, as well as around the country by phone. In addition to those divorce expenses, you are probably facing a whole new set of bills, which is why maintaining a strict budget is more important than ever if you want to take control of your finances. “If you see you’re going to be short at the end of the month, anticipate and look for solutions,” Decker suggests, including getting vocal about your situation. Some credit card companies allow you to temporarily stop payments during major life events, which can include divorce.

2. Make new plans for the future.
If you received a settlement from the divorce, seek advice to find the best investment options to improve your finances. Do you need monthly interest dividends that will help with budget, or do you need stable, long-term investments that will enable you to save for retirement? “Working with a quality financial planner to maximize and potentially protect your settlement can bring much-needed peace of mind after riding the emotional roller coaster of divorce,” Decker says.

3. Avoid “Til debt do you part.”
Now is not the time to say, “I don’t care what he/she does anymore.” Rather, to take control of finances, stay on top of the paperwork and make sure all joint accounts are severed, including bank accounts, retirement accounts, and credit cards. “If you’re still attached by joint debts, make sure you get duplicate copies of the statement, otherwise your credit will be ruined if your ex can’t or won’t pay,” Decker says.

4. Move on!
After the divorce is finalized, you can and should establish a new bank account in your own name. Many adapt a whole new way of thinking when it comes to life after divorce, including how they manage their money. Meet with a financial advisor to assess your current situation and help with budget, and consider switching banks – many online banks offer a convenient, free way to manage your money.

Breathe a sigh of relief in knowing this will all soon be behind you. With the right planning and mindset, you can be richer in every way.

Have you gone through a divorce recently? Did you emerge financially unscathed by following tips like these?

photo credit: Photos by Lina

1. Get Lovey-Dovey Over His & Her Paperwork
If the bride is changing her name, she’ll need to update her passport, Social Security card, driver’s license, and other documents. Thakor suggests doing this ASAP. “Early in your marriage is a great time to sit down and make a comprehensive list of all your assets, accounts, important papers, etc., – something both of you should do and share,” even if the bride is keeping her name. Start with the most important documents, then move on to routine items like magazine subscriptions and utility bills. Both newlyweds will also want to name new beneficiaries on their retirement plans in an effort to take control of finances.


2. Consider a (Financial) Three-Way
Some couples keep separate bank accounts, while others merge all their money. There’s also an intermediate option Thakor calls a “financial three-way,” which includes a separate bank account for each of you and one joint account, potentially requiring you to find a new bank. “I am increasingly seeing this as so many couples are marrying later in life and coming to marriages with income, assets, and habits that are fairly ingrained,” she explains. For whichever approach you choose, she says, communication is key.

Jennifer‘s note: my fiancé and I do this now. We have a joint account into which we put an equal percentage of our paychecks for household items and the occasional night out. That way no matter who makes what we’re both contributing equally, and I don’t have to feel guilty about splurging on a manicure when I have a little extra in my account.

3. Getting in the (IRS) Bed Together – Or Not
Not so fast – you don’t have to file taxes jointly. For instance, if one of you owns a business, the other may want to file separately in case any bookkeeping issues arise on the corporate level. The downside of separate returns is it lowers the ceiling for things like Roth IRA contributions and capital gains, which won’t help with budget issues. “This is definitely a discussion for you and your accountant.” says Thakor.

Did you get married recently or are you getting ready to get married? How are you and your betrothed handling finances? If you’ve been married a long time, what are your keys to successful financial communication in a marriage?