It is a good idea to start preparing financially for a divorce before any paperwork is filed with the courts. A big part of this is getting organized, knowing your budget, familiarizing yourself with your spending habits and income level, and getting a handle on debts. While it can be difficult to have conversations with your soon-to-be ex-spouse, the efforts will go a long way in preparing you for your financial future and keeping down the cost of your divorce.
Should You Put Money Aside Before Getting a Divorce?
It is normal to want to set money aside to cover the expenses of a divorce. Doing so is sensible and not really advantageous for one side or the other as California is a community property state. This means all community property will be divided equally during a divorce.
As getting a divorce can be expensive, it would make sense to speak with your spouse to determine how much money to put aside. Or you could take some money and put it aside for yourself. Divorce expenses will include but are not limited to the following:
- Attorney fees
- Filing fees
- Cost of living expenses
- Cost of child support
- Cost of spousal support
- Therapy
- Bills
- Mediation fees
- Costs associated with a contested or uncontested divorce
Strengthen Your Position by Budgeting for the Future
You will need to map out what your budget will be after your divorce has finalized. It is important to understand this, so you do not overspend. Get a clear picture of your financial situation by understanding what your basic needs are and take stock in your income and expenditures.
Here is a list of basic necessities you can reference, but feel free to make your own:
- Housing (rent or mortgage payments)
- Utilities
- Gas (for commuting to work or drop-offs for school and childcare)
- Food
- Debt repayments
- Phone
- Childcare (daycare, after-school activities, child support)
- Personal care (prescription medications, toiletries, etc.)
- Clothing
Here is a list of items you may want to start focusing on post-divorce:
- Investments
- Real estate
- Money for savings
- Vacations
- Hobbies
- More aggressive debt repayment
- Retirement accounts
Knowing your budget can also help you during the divorce with negotiations. If you have a clear understanding of what your financial needs are, you can negotiate better.
Understand That Your Financial Situation Will Change
During a divorce, two incomes are divided in an equal manner. You will no longer have the support of a dual income, which may mean making some sacrifices as you move forward. The reality is both you and your spouse will go through an adjustment period, which means acknowledging that you both will be in different financial situations moving forward.
The sooner you realize your life will need to change, the more time you can give yourself to take the financial steps towards creating a better financial position for yourself in the future.
For assistance with your divorce, contact our firm online or by calling (949) 577-7935 to schedule an initial consultation.