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  • Writer's pictureClaire Edwards

3 simple steps for Finance Planning in Life After Separation

Here are three easy steps to follow when handling finances post separation.

  1. Getting a Grip on Your Money After Splitting Up ... So, you've decided to part ways, and now it's time to figure out the money stuff. First things first, do you want to look at what's coming in and going out each month (income and expenses), or do you want to dive into what you've got and what you owe (assets and debts)? It's like choosing between the day-to-day cash flow or the big picture of your financial life. Okay, let's break it down. Income and assets are the good guys – money rolling in monthly and the big stash you've built up over the years. High five for having income and assets! Now, the not-so-fun part: expenses and debts. Yeah, they're the villains – the regular bills and the pile of what you owe. Remember, expenses keep coming back, and debts are the hefty amounts you owe over time (like credit card debt) or chunk by chunk (mortgage or car payments). When chatting with your legal eagle, throw in the term "spousal support" to make sure they get your money story. Imagine your family as a small business – this is your profit and loss statement, the month-to-month report card. Assets and debts, when you add them up, show your net worth. Use "community property" lingo when talking about the stuff you both own with your lawyer. If your family were a small business, this would be your financial snapshot, like a balance sheet. This freeze-frame happens on the day you or your spouse files for the divorce that gets finalized.

  2. Holding Tight to What's Yours and Navigating Debts ... Let's talk about keeping your money safe and figuring out those debts. Everyone's situation is like a unique puzzle. Lawyers are like puzzle masters – they've seen it all. If you've got loads of cash just sitting around (like in savings), and you're debt-free, you might not need a lawyer at all. High fives to you again! Now, if your home is your main gig and there's no mortgage, but it's pretty much the only valuable thing you've got, deciding who stays in the house can get tricky. Sometimes selling the house is like cracking open a piggy bank – it helps divide the cash. But if you're in debt city, with a mortgage, car payments, and no retirement fund, you might not need a fancy lawyer either. Surprisingly, it's the regular folks – with a bit of this and a bit of that – who need some legal navigation.

  3. Budgeting for the Real World ... Time to tackle the nitty-gritty – your monthly budget. Now that you're flying solo, you need to see if your paycheck can cover your bills. Remember all those shared expenses like the mortgage, electric bill, and Netflix subscription? It's time to divvy them up. Here's the kicker: my advice might seem a bit unfair – each person pays only for what directly benefits them. I get it, not exactly a fairytale split, but that's where spousal support swoops in. If you're struggling to pay your bills, and your ex has some extra cash, that's a cue for spousal support to play a part in your divorce. I suggest you get an attorney as soon as you know about the divorce so you can secure as much as possible as early as possible.

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