At the start of every divorce, a couple’s financial picture can range anywhere from tidy to unorganized to altogether unknown. Even when finances are in order, couples, whether inadvertently or by their own hand, take steps that ultimately undo their past hard work, causing themselves further problems.
Regardless of where you fall on the spectrum, it’s important to know before commencing the divorce process what you can do to clean up — and keep clean — your finances.
Here are seven issues to pay close attention to as you ready your finances for divorce.
1. Keep copious records.
Even if you never did before, today’s a perfect time to start. Your lawyer will need to know how much money is coming in and going out, right down to that coffee run to Starbucks you made yesterday morning. You’d be surprised how quickly small purchases can add up, sometimes to thousands of dollars each year, especially if you’re spending cash — a dollar here, three dollars there.
Pay close attention, too, to expenses that don’t show up in a typical month, like repairs. They count, and often for a lot.
As for that second job or side hustle you have, which can change from month to month, and seems like “bonus” money? It also counts, so be sure to include it.
2. Speak nicely.
To your soon-to-be-ex, the person who’s making your life miserable? Yes, especially him or her. Your spouse will probably not like very much that you’re keeping tabs on their spending or asking for clarification about why they made certain expenditures. An attitude or nasty tone can only make matters worse.
The same goes for the folks on the other end of the phone at the utility company, bank, and insurance carrier (see item #3 below). They can help you with your fact-finding and sometimes offer you information that you won’t see on a statement. Be level-headed and polite, not the crazy recorded subject who trainees listen to and learn from in class. Remember, you can catch more flies with honey than with vinegar.
3. Collect your financial documents.
This task can be daunting, especially if you aren’t the organized type or have been in the past. Fortunately for you, financial records group nicely into neat categories. If you’re systematic in your search, you should be able to locate most of the documents you need, as well as produce them.
Your lawyer will be able to subpoena the rest during the discovery phase of your divorce. But the more you can find now, the easier this will be later on in the process.
4. Stick to your usual pattern of spending and saving.
That means don’t make any big purchases you wouldn’t make ordinarily.
As tempting as it may be, refrain from tapping into your savings account to buy that diamond bracelet you always wanted or fancy sports car. Apart from making you look bad, the court will take steps to make the aggrieved party whole again, and you may not like how they do it.
5. Don’t make any significant changes to your financial picture.
Think Billy Joel and “Don’t go changing” signers on bank accounts, beneficiaries, and whatever else has been part of the status quo.
Again, not only will it create ill-will with your spouse; it will do the same with the court. You’re in the spotlight now, so start acting like a boy- or girl scout and behave honorably and honestly, even if your spouse isn’t.
6. Beware of what you read or hear.
You’ve made the life-changing decision to divorce. Naturally, you’re going to start breaking the news to people you know, and some you don’t.
Though there will be many differences between the folks you speak with, one thing will become abundantly clear: most will offer you their two-cents, even when you haven’t asked for it. That’s especially true for conversations about money, which has a way of getting people’s back up.
The same goes for what you read online. It should go without saying that not every resource is reputable or accurate. So take advice that isn’t coming from someone you trust with a grain a salt.
7. Ask for help.
There’s no shame in needing guidance through the divorce process. The good news is you don’t have to go it alone. A strong, capable legal team can help you through your divorce so that it moves along quickly and economically. And you come out of it in a better position both financially and emotionally than you were before.