At some point 4 words were spoken: “Will you marry me?”.
Now, 4 more words have been spoken: “I want a divorce”.
Looking ahead and navigating your divorce you will need 4 new words: own, owe, in, out.
From the exhilaration of “will you marry me” to the devastation of “I want a divorce” comes the security of “own, owe, in, out”.
Fall brings a fresh start after the lazy days of summer. Now it’s time to educate yourself and take control of your financial situation.
What do you own: home, condo, vacation property, checking account, savings account, investment/brokerage accounts, car, retirement plans, annuities, pension
What do you owe: mortgage, home equity line, car loan, school loan, credit card debt
What’s coming in: employment income, investment income, alimony, child support, social security, pension
What’s going out: all fixed/necessary expenses such as mortgage, rent, home insurance, car payment, health insurance, food, cell phone; all discretionary expenses such as cable, vacations, eating out
One indisputable fact of divorce is that two households cost more to operate than one, but your combined total income is unchanged. A post-divorce lifestyle may look very different than the one you had while married. Your strength and security will be aided by a firm understanding of your finances. Will your income meet your expenses? What will happen when child support or alimony ends?
Gather statements for all of your assets (what you own) and your liabilities (what you owe). This is your net worth
Track all sources of income (what’s coming in) and track all expenses (what’s going out). This is your cash flow or budget.
Understanding your financial picture will enable you to negotiate a settlement and have a solid foundation for a new life.
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