One of the biggest changes that you have to deal with during a divorce is figuring out finances. This can be challenging because you still have to support basic life needs, but you’ll only have your own income to rely on.
There are a few things to consider that may help you as you set up your finances. Here are the top three:
1. Assessing your individual expenses
As you transition from sharing expenses with your ex to managing them independently, it’s crucial to evaluate your individual financial needs. This includes costs like housing, utilities, groceries, transportation, insurance, and any additional expenses you’ll be responsible for after the divorce. Create a comprehensive budget to help you plan and manage your finances effectively.
2. Splitting joint assets and liabilities
You and your soon-to-be ex will need to divide your joint assets and liabilities, such as property, investments, debts and retirement accounts. It’s important to consider the tax implications of these decisions. For instance, selling a property might result in capital gains tax or withdrawing from a retirement account early could incur penalties.
3. Child support amounts
If you have children, you may need to factor in child support payments. The amount of child support will depend on factors like each parent’s income, the number of children and the custody arrangement. Even in the absence of child support orders, you still need to plan for the child’s financial needs. These payments can have a significant impact on your budget, so it’s essential to plan for them accordingly.
Being realistic as you’re handling the property division is crucial. Logical thinking can go a long way in you getting a property division agreement beneficial to you.