Giving women quality financial guidance for women, during and after divorce. Savvy Ladies Helpline Volunteer Donna Cates CDFA®, CRPC® shares her insights on some of the most frequently asked divorce & money questions we get on the Savvy Ladies Helpline.
Q: I am so OVERWHELMED, but I need help organizing my finances. Most assets are in the spouse’s name. How do I start?
A: It’s important to remember that you don’t have to face this alone. Start by gathering as much financial information as you can, including bank statements, credit card bills, tax returns, and any documentation of assets and debts. Creating a list of all assets and liabilities will help you get a clearer picture of your financial situation. Since most assets are in your spouse’s name, consult with a financial advisor or a divorce attorney who can guide you through the legal steps to ensure you receive a fair settlement. They can help you understand your rights, protect your interests, and organize your finances for a more secure future. Taking these steps, even small ones can make a big difference in managing this challenging time. Consider running a credit report on yourself so you can confirm all the outstanding debt that is either jointly held with your spouse or in your name alone.
Q: I would like advice on managing debt incurred during the ongoing divorce process. What options are available for reducing credit debt while enduring no financial support from the other parent?
A: Managing debt during a divorce can be particularly challenging, especially without financial support from the other parent. First, consider negotiating with creditors for lower interest rates or more manageable payment plans; many are willing to work with you if they understand your situation. Additionally, you might explore debt consolidation, which can simplify payments and potentially reduce interest rates. Budgeting is crucial: prioritize essential expenses and look for areas to cut costs. You might also consider speaking with a financial advisor or credit counselor for personalized advice and strategies. Lastly, discussing options like bankruptcy with a legal expert can provide a clearer path forward if the debt becomes unmanageable. Taking proactive steps now can help alleviate financial stress and provide a more stable foundation for your future.
Q: I realize after 29 years, my husband is a narcissistic alcoholic, and our finances are a mess. How do I open up my own accounts?
A: Taking steps to secure your financial independence is important. To open your own accounts, start by gathering your personal identification documents such as your driver’s license, Social Security card, and any other necessary paperwork. Choose a new bank or credit union that you trust and visit them either online or in person to open a new checking and savings account in your name only. Make sure to update any direct deposits or automatic payments to your new accounts. If you share any credit cards, consider opening a new credit card in your name to start building your individual credit history. Keep in mind that the assets you put in the new bank account are still considered martial assets and must be disclosed. It does provide a level of protection since your spouse won’t have access to the new account. It may also be wise to consult with a financial advisor or attorney to ensure you’re protecting your assets and making informed decisions about your financial future. Taking these steps can help you regain control and start building a secure financial foundation for yourself.
Q: How can I get financially back on top post-divorce?
A: Getting Back on Top Financially Post-Divorce: Rebuilding your financial stability after a divorce is a significant step, and feeling overwhelmed is understandable. Start by gently assessing your current financial situation. List all your assets, liabilities, income, and expenses to get a clear picture. Create a realistic budget that reflects your new circumstances, focusing on essential expenses and finding areas where you can cut back. Establishing an emergency fund is crucial to cover unexpected costs and prevent further debt. It’s also a good idea to check your credit report for any discrepancies or joint accounts that need attention, ensuring your credit history accurately reflects your current status.
As you look to the future, setting clear financial goals can help you stay focused and motivated. Whether it’s saving for retirement, buying a home, or pursuing further education, having specific goals gives you direction. Consider opening individual retirement accounts (IRAs) or contributing to employer-sponsored plans if available. Consulting with a financial advisor can provide you with personalized strategies and support. Additionally, educating yourself about financial management through books, courses, or workshops can empower you. Remember, taking these steps not only helps you regain control over your finances but also builds a solid foundation for a more secure and hopeful future. You’re not alone in this journey, and with patience and perseverance, you can achieve financial stability and peace of mind.
Q: How do I create a budget and ways to do it that assist the divorce process for what is needed in terms of documentation of expenses as I have kids?
A: Creating a Budget and Documenting Expenses of Children: Creating a budget during a divorce, especially when you have children, can provide clarity and support your legal process. Start by listing all sources of income and categorizing your expenses into essentials (housing, utilities, food, childcare) and non-essentials (cable tv, club memberships, etc.). Track your spending for a few months to get an accurate picture of your financial habits or look back at the last 6-12 months of living expenses to establish monthly averages. Tools like budgeting apps or spreadsheets can help you organize this information effectively. For the divorce process, it’s important to keep detailed records of all expenses, especially those related to your children, such as school fees, extracurricular activities, medical expenses, and daily care costs. This documentation will be crucial for court proceedings or negotiations regarding child support and alimony. By maintaining a thorough and accurate budget, you’ll not only manage your finances better but also provide essential documentation that supports your case during the divorce.
Q: Will my personal checking account and the car I purchased during the marriage be his before I file a divorce? What is he allowed to have from me? Should I get a separation first to protect my assets?
A: What Can I Keep; What Will He Get; and Should I Separate First to Protect Assets: In divorce proceedings, how marital assets are divided depends on whether the state follows equitable distribution or community property laws. In equitable distribution states, assets are divided fairly but not necessarily equally. The court considers various factors such as the length of the marriage, each spouse’s financial situation, contributions to the marriage, and future needs. The aim is to reach a fair distribution based on these factors. In contrast, community property states mandate a 50/50 split of all marital assets, regardless of individual circumstances. This means that everything acquired during the marriage is considered jointly owned and is divided equally between the spouses.
Separating assets before or during a divorce won’t necessarily protect them from being divided. Courts often scrutinize such actions to ensure they are not attempts to hide or unfairly redistribute assets. Instead, obtaining a Financial Status Quo Order once you’ve filed for divorce can be more effective. This legal order maintains the current financial situation by preventing either spouse from making significant financial changes, such as depleting accounts or incurring large debts. It ensures transparency and fairness, preserving assets until the court can make an informed decision about their distribution. This approach provides a safeguard for both parties, ensuring that all assets are accounted for and divided according to the law.
Q: How Do I Prioritize Next Steps When Receiving a Lump Sum Settlement Payout?
A: When receiving a lump sum settlement payment due to divorce, it’s crucial to carefully consider your values, priorities, and genuine needs before deciding how to use the funds. Begin by assessing your immediate financial needs, such as paying off high-interest debt, establishing an emergency fund, or covering essential living expenses. Reflect on your long-term goals, such as saving for retirement, investing in education, or purchasing a home. Consulting with a financial advisor can provide tailored guidance, ensuring you make informed decisions aligning with your financial objectives and values. Taking a thoughtful and strategic approach will help you use the lump sum to build a secure and fulfilling future.
Q: I am recently divorced and am financially struggling. I need advice on how to move forward financially
A: Post-Divorce and Struggling Financially: If you’re struggling financially post-divorce, start by reassessing your financial situation and creating a realistic budget that prioritizes essential expenses. Cut unnecessary costs and look for ways to increase your income, such as taking on a part-time job or freelance work. Reach out to a financial advisor or a credit counselor for professional advice on managing debt and improving your financial health. Additionally, explore community resources or support programs that can provide temporary assistance. By taking proactive steps and seeking support, you can gradually stabilize your finances and work towards a more secure future.
