Debt can create stress and financial strain especially if you are going through a divorce. Knowing that you will now need to shoulder financial responsibilities alone may only exacerbate your uncertainty about the future.
Recognizing that divorce will impact your finances may give you an incentive to make immediate changes to your budget. With careful strategizing, you may not only effectively manage your debts, but also prevent your divorce from paralyzing your finances.
Close joint accounts immediately
Throughout your marriage, you and your spouse probably shared a number of joint accounts. These may include banking accounts, utility accounts, investments and even company-sponsored retirement benefits. When divorce is inevitable, immediately close any joint accounts. Keeping them open leaves the possibility of continued spending from your spouse. Any irrational behaviors that cause significant financial repercussions may reflect on your credit even if your spouse was the person who spent frivolously.
The sooner you close joint accounts, the sooner you can focus on strengthening your own financial foundation. You can take proactive steps to build your credit such as responsibly using a credit card and making sure you pay your bills on time. You can also open your own banking account so you can effectively track and manage your money.
Make a conservative budget
Using a budget is an excellent way to monitor your spending and saving each month. According to U.S. News, one financial benefit of a divorce is that you have more control over how you use your money. In the beginning, cut out any unnecessary expenses. Spend conservatively and save generously when you can. Over time, you will acclimate to managing your finances alone.
You may need to update your budget as you experience changes to your income or debts. Choosing to see your divorce as an opportunity to reset your finances may help you get through the unprecedented changes.