Divorce is a challenging and often overwhelming life event that can have significant financial implications.
Planning ahead can help mitigate the impact and ensure a smoother transition.
1. Organize financial documents
Start by gathering and organizing all your financial documents. This includes bank statements, tax returns, investment accounts and any other relevant records. Having a clear picture of your financial situation will empower you to make informed decisions during the divorce process.
2. Create a budget for single living
As you navigate the path to divorce, it is important to anticipate the financial changes that come with single living. Develop a realistic budget that reflects your individual expenses, taking into account housing, utilities, groceries and other necessities. This budget will serve as a foundation for your post-divorce financial stability.
3. Build an emergency fund
Financial setbacks can happen unexpectedly, and having a safety net in place is necessary. Start building an emergency fund to cover unforeseen expenses. This fund will provide a financial cushion during the transition and can prevent you from accumulating debt in times of financial strain.
4. Understand your assets and debts
Gain a comprehensive understanding of your marital assets and debts. Identify joint accounts, property and liabilities. Knowing the extent of your financial entanglements will help you make informed decisions about the division of assets and debts during the divorce process.
While Illinois has one of the lowest divorce rates, which was 1.3 divorces per 1,000 population between 2019 and 2021, many people still find dissolving a marriage is the best option. After making the decision, it is important to financially plan for the future.