4 Steps to Being Financially Prepared for a Divorce

No one wants to face their marriage coming to an end -- it's an incredibly sad time. But if you've decided it's the right decision for you it's important to get organized and set yourself up for financial success as you begin your new journey.
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Young couple having relationship difficulties, shallow depth of field focus on foreground
Young couple having relationship difficulties, shallow depth of field focus on foreground

Who hasn't made a financial mistake one time or another? If you're human you've probably missed a credit card payment, charged a vacation when you shouldn't have, or bounced a check. We're all a work in progress, after all.

But have you ever thought about marriage being a financial -- not just romantic -- mistake?

Jessica Simpson -- who just celebrated the 10th anniversary of her fashion line -- made headlines when she told CNBC host Kelly Evans her biggest financial mistake was "her first marriage". Evan's response? "That's actually a common answer, believe it or not!"

So how do you keep your head above water when you're going through a divorce? We've got some tips that will keep you financially sound if your marriage comes to an end.

1. Get Your Documents Together
Early in the divorce process you should be assembling your financial documents, including tax returns, year end reports from credit card companies, and interest/dividend statements. Put the hard copies somewhere safe -- Divorce Financial Strategist Jeff Landers suggests entrusting a close friend or family member, or even paying for a safe deposit box. Although we don't want to think about things getting ugly as a marriage dissolves, it's always a possibility. Landers says that by having these documents "you avoid any possible unpleasantness (not to mention time and expense) trying to get copies of them later."

2. Know Your Credit
Whether you want to accept it or not, good credit makes the world go around. Your world, at least. You can't buy a car, get an apartment, or qualify for a mortgage unless you've got good credit. Of course you should be pulling a yearly credit report for yourself and your spouse, but let's say you haven't done that (hey, we're not perfect either.) Landers suggests pulling a report as soon as possible, and making note of any errors you might spot. It's also important to keep your eye on any joint credit card statements (before they're closed).

3. Open Your Own Accounts
When you first got married you probably made a personal decision about maintaining separate accounts or combining things jointly. If things are joint, Family Law Attorney Katie Kiihnl Parker notes it can be more complicated. "The biggest problem I see with divorcing couples is when the parties only use one checking account, whether the account is held in joint names or in the individual name of only one spouse," she says. "This is especially a problem because a divorcing husband could remove all of the funds from the account or takes the wife's name off the account, leaving the wife with no access to marital funds."

Now that you're getting divorced -- and for obvious reasons -- it's important to ensure you have your own established bank accounts and credit cards. Once you've got this set up, Parker suggests building an emergency fund that only you will have access to, "just in case".

4. Assemble Your Team
From property division and tax consequences to investments divorce can be complicated. Parker suggests bringing a financial planner on board early in the process. Who else might you need on this journey? A matrimonial/family law attorney (for obvious reasons) and a therapist/counselor (to help you survive the process).

No one wants to face their marriage coming to an end -- it's an incredibly sad time. But if you've decided it's the right decision for you it's important to get organized and set yourself up for financial success as you begin your new journey.

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Sarah Chang, the author of this article, serves as Managing Editor at GoGirl Finance. Her writing has been seen on The Huffington Post and The Stir, among other publications.

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