In Wisconsin, divorce can come with significant financial challenges, regardless of your marriage stage or age. Managing your finances during and after divorce is crucial and can ensure your future financial stability.
Understand the financial impacts
Be prepared for the financial impact of your divorce as going from two incomes to one may require a few adjustments. You may seek assistance from a financial professional, especially while working on a divorce settlement agreement. Using spending calculators and other tools can help you assess your current expenses and strategize future adjustments.
Collect important documents
Gathering relevant financial documents is vital to the financial process during divorce. Collect at least three years’ worth of:
- Bank statements
- Real estate documents
- Loan paperwork
- Retirement account details
- Insurance policies
- Stocks, bonds
- Will and trust documents
- Tax returns
Additionally, it’a a good idea to construct a comprehensive list of your personal property, inventory of the items in your home and sentimental or other items in storage or off site.
Review your accounts
Review any joint accounts and consider rerouting your direct deposits, closing the accounts and updating your address details. Assess all documents needing beneficiary changes or updates, such as life insurance, retirement accounts, wills and power of attorney documents.
Make a budget
Develop a monthly budget that shows your new post-divorce financial circumstances. To make a budget, review all expenses such as:
- Bills
- Medical costs
- Groceries
- Home repairs
- Children’s activities fees
Start with your income and deduct your expenses to determine your financial standing. Using your budget, you can make adjustments to your lifestyle and discretionary spending as needed.
Research health insurance options
If you had insurance coverage under your spouse’s policy, look for alternatives after your divorce. Consider health plans from your employer, as divorce qualifies as a life-change event, and you can enroll in a policy outside of the standard yearly enrollment period. You may also consider COBRA insurance, although it tends to be costly.
Divorce can disrupt your finances, but staying proactive can help you establish a solid financial base for yourself in the future.