Money is one of the leading causes of divorce, as you probably know. According to divorcestatistics.org, 41% of marriages now end in divorce--and most of those come as a surprise to at least one spouse. That’s why we think it’s so important to plan for divorce even if you never get one.
What to do before divorce becomes an option
Because money is usually connected with a strained marriage, it’s so important to make sure money won’t affect you and your spouse. You do this by communicating and being open about finances from the start. And if you’ve been hiding something (like a massive credit card balance), now is the time to come clean so you can work towards financial freedom together.
Want to divorce-proof the financial side of your marriage? We recommend that you:
Talk about more than your money troubles; talk about your money goals. What do you want to do together as a couple? Where do you see yourselves in retirement? What sort of income or budget will help you get there?
Having a monthly (or more frequent) meeting is a great way to touch base, see what your partner is spending, and just open the channel for communication. If you haven’t done this yet, it may cause a couple of arguments, but it will move you both enough to make sure you’re on the same page in the future.
Transparency and mutual responsibility are cornerstones of marriage. The same goes for your bank accounts. If you don’t currently share accounts, it may be time to reconsider. With a shared account, you’ll be able to see what comes in, what goes out, and have open and honest dialogues about what you want for one another. This also reduces surprises down the road that are often the “final straw” leading to an unexpected divorce.
We know that sometimes these steps are too little, too late, which is why we also think you should prepare your finances in the event of divorce.
What to do with your finances in the midst of a divorce
If you’re worried that divorce is imminent, or you just want to know what to do in case of divorce, here are a few simple tips:
- Change beneficiaries on your insurance policies, 401k, work benefits, etc. to a child or immediate family member.
- Find a trustworthy attorney who can guide you through the process without causing undue drama. Ask friends or relatives who have been in your shoes. Don’t be shy; ask questions about everything so that you know exactly what’s happening.
- Focus on your single income. This could mean boosting your focus on your side hustle, talking to your employer about a raise or taking on more hours. Now is the time to gear up to be a single income household.
- Know your money. This goes for men as well, but women especially need to make sure they know their numbers. While they handled the day-to-day finances of a home, many women find that they don’t know what their partners have in savings or retirement funds, and don’t know what their current assets are. Talk to your financial advisor and ask questions to make sure you’re ready.
Empower yourself during this emotional time
Nobody gets married thinking it will end in divorce. At least, we hope not. But divorce does happen and it can be emotional. Hopefully, by planning for your financial life outside of marriage, you’ll be better equipped to move forward as a single man or woman.
If you’re worried about your finances after divorce, you can always talk to our Certified Financial Planner® to see how we can support you. You can reach our team at [email protected] to discuss our investment management services.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.