Separation or divorce can be stressful for both your family and your finances. This life changing experience requires many day-to-day adjustments, and the financial consequences can be significant.
As you go through separation or divorce, it is important to be proactive and informed about your finances. Here are six things you will want to do to “uncouple” your money.
Accounts – If you have joint checking and savings accounts with your spouse or partner, you will want to close them and open new individual accounts. This will help you manage your personal funds and minimize financial conflicts.
Budget – A new life will mean a new budget. A change in income will require a change in spending. Assess your spending and be realistic about your new lifestyle and current assets. You may need to make a few changes to balance your budget.
Debt – Ideally, you’ll want to divide any joint debt before the divorce/separation is finalized. It is important to get the debt in the name of the spouse or partner who will be responsible for it going forward. Town & Country Federal Credit Union can work with you to refinance joint loans such as auto, mortgage and home equity loans once you know how the assets will be allocated. Remember, just because a judge may assign financial responsibility of a debt to one person, both parties are still obligated to pay that debt until its refinanced.
Credit Cards – Plan to cancel any joint credit card accounts and open individual accounts. This will help reduce the possibility of accumulating any additional joint debt. To help take control of outstanding credit card debt, consider transferring balances or consolidate the debt with a flexible personal loan. This could help streamline debt, possibly lower payments, and get back on track.
Credit Score – It is not uncommon for your credit score to dip when going through separation or divorce. Be sure to review your credit report periodically to make sure it is in good shape when you are ready to apply for new credit. It is also important to look for any mistakes that could be negatively impacting your score.
Record Keeping – Take the time to update your personal information and passwords on all accounts, loans, insurance and estate documents and all other financial assets. You will also need to change names on deeds and titles following a divorce. Also, if you have changed your name, be sure to update your social security records. Town & Country Federal Credit Union is here to help you through any of life’s financial challenges today and to support you to secure your financial future tomorrow. Don’t hesitate to reach out for help.