No one wants to see their relationship or marriage end but it happens. That’s enough of a blow to your life to send you into a tailspin that you don’t want to have to think about finances. But, keep in mind that if you don’t think about it and protect your money it could leave you financially devastated. Here are some tips to help you protect your money after you go through the unfortunate event of a break up.
1. Credit report. Pull your credit report (there are actually three credit reporting agencies – Transunion, Equifax and Experian). This is the first step you need to take because your credit report will help you know everything you have out there. You might want to pull it before a break up so you know where you stand financially. Plus it will show you anything you have together, etc. This will help you plan for your financial future.
2. Close joint accounts. This is one thing that people after a break up often don’t think about. It’s important to make sure you close these joint accounts though because if your partner’s name is on the account(s) they have access to it. When it comes to protecting your money, closing a joint account so your partner doesn’t have access to the funds is imperative. Keep in mind that if you’ve both been putting money into a joint account (for example a savings account or checking account) you should split the money giving half to your ex. Also if you have any credit cards together or loans together, you’ll want to get those closed or out of your name.
3. It’s not easy closing all your joint accounts. It’s time consuming and you may even need the help of a lawyer or two! This is why you should keep good records of what you have and where you have it. You have to keep track of every account, where those accounts are, what is owed, how much is in there, etc. Before the divorce, you want to know exactly where you stand financially. A great recommendation for ways to avoid financial disaster after a break up is to have an agreement drawn up with information including how you will pay debts, what happens to money in a joint account, etc in the event of a break up.
4. Don’t assume your spouse (soon to be ex) is paying on debts. If both your names are on a home, car loan, credit card, etc then you are both responsible for that debt. However, during a separation emotions are raw and one person can purposely not pay on a debt which will affect your credit. Keep up on your debts during a separation/divorce to make sure that everything is being paid on.
5. Take it slow. After you’ve done all the steps mentioned above the next best thing for you to do after a break up is to take things slow. Meaning you shouldn’t run out and buy a new car, open a new credit card or buy a new house. You need to figure out where you are financially, that all joint accounts have been closed and that you put into place some goals to stand on your own two feet financially.
Before you separate or divorce your partner it might be a good idea to meet with a financial advisor, financial coach or attorney first. You need to know not only where you currently are financially but what you need to do to protect your money. They can also help you know what steps/actions you need to take once you’re single again.