Your spouse has left you. You're at home with the kids and a dwindling bank account. You feel overwhelmed and a deep sense of injustice. You don't know where to begin picking up the pieces. Where do you start?
There is a bitter irony in divorce that just as life seems the most out of control, you need to be on top of every detail. The financial side of divorce is a business transaction and if you don't have documents to back up your side of the deal, chances are you will not fare so well.
Here are three suggestions for how to take control:
1. Determine your immediate financial needs: Create a budget.
A budget serves two purposes. First, it gives you a realistic assessment of how much money you need on a day-to-day basis. It's important to be as detailed as possible. This the place to include the cost of groceries, gas and after-school activities for the kids.
If you leave items out, they won't be factored into your divorce and you'll have a shortfall. Second, a budget is a powerful tool to give to your lawyer if you're in the middle of a divorce and you need a spousal support order. Finally, projected budgets can help you look ahead to the next stage of your life. In this sense they are empowering.
2. Protect your credit rating.
Time and again, people have complained to me that their spouse has destroyed their credit, especially during divorce. This is why it's especially important to take ownership of your credit score early on. Remember, if you and your soon-to-be ex have joint debt, such as credit card bills or a mortgage, your credit ratings are inextricably linked. So it's essential to identify all joint debt.
Either close the accounts or freeze them, and keep payments current to the best of your ability. If your credit score slips, your borrowing costs will go up and this will be money out of your pocket for years to come.
3. Know what you have.
Part of divorce involves the division of marital assets. The list of what you own usually extends well beyond your car, house and furniture. You should also include the family business, retirement plans and certain employer benefits, not to mention bank accounts for both you and your spouse.
If you don't know what these are, make it a personal project to find out what they are. If your situation is complicated, hire a professional to help you. Remember, if you're not sure what you and your spouse own, chances are that he won't be forthcoming with details and the courts won't know either.