Staying on Track Financially

If you've managed to get this far without a spending plan, you'll need one now. If you're not familiar with how the money flows in and out of the family coffers because the other guy has always taken care of it, it's time to get with the program. If you are litigating, you'll have to complete a financial statement which the judge will use to determine your future needs for support. If you're negotiating, you'll need to know what you're paying for taxes, entertainment, vacations, food, rent, medical expenses and everything else or you'll sell yourself short. Don't forget to budget in your lawyer's costs.

Since there may be interruptions in your income as you go through the divorce, you'll need a stash at the ready — an emergency fund — to fill the gaps. Consider money from a joint account or line of credit or, in extreme circumstances, taking advances against a supplemental credit card. Feel like you're stealing from your ex? Get over it. The road to divorce can be long and bumpy and you' may have to lay out a lot of cash along the way. Document where you've taken the money and indicate that you know this will be flushed out in the accounting and final division of assets.

Supplemental cards — the credit cards you use that are tied to your spouse’s cards — do Jack Squat to build your credit history. It doesn't matter who pays the bill. Have a joint line of credit at the bank? Have your signature removed, or write a letter that you hand-deliver to the bank that says, "As of today's date, no cheque can be drawn against this line of credit without both signatures." And don't forget to change your PIN number.

If you considered your partner to be your disability plan, it's time to get a new plan ... one that will be with you, regardless. If you have kids, it's even more important to have sufficient disability and life insurance to protect them. Another good use of life insurance: to protect your stream of child support payments. If your STBE belongs to a group health plan, your joint dependent children should still be covered under that plan. You'll need to get a medical plan of your own.

When you divorce the law provides that any benefit to your former spouse in your will is revoked. That automatic revocation does not apply to beneficiary designations where you've named your ex so change your insurance policy and retirement plan designations immediately. If you've executed powers of attorney in which you've named your ex to act on your behalf, have them revoked immediately.

No matter what your partner promises you as (s)he exists stage left, take it with a grain of salt. Emotions and attitudes swing from one extreme to another during marriage breakdown, and today's guilt-promise can be easily rescinded tomorrow.

Protect yourself. Get to work finding everything you can to take to the lawyer. Remove your name from all forms of credit. Fill up your emergency fund. At some point you'll also have to start planning financially for the future.

If you think the government will take care of retirement for you, a gentle reminder: you thought your spouse was going to do that too. You are the only person you can rely on.

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