Wednesday, February 22, 2017
Steering through the financial tides of divorce
Even in the most amicable of separations, divorce is a life-changing event.
“Your emotions can be out of control,” says Dawn Kress, branch manager at Dupaco Community Credit Union’s Asbury, Iowa, branch. “However, you don’t want your finances to be.”
With careful planning, you can take steps toward financial security in life post-marriage.
Follow these do’s and don’ts to help you stay—or get back—on solid financial footing:
- DO -
DO gather and make copies of your financial documents—including monthly checking, credit card, mortgage, 401(k) and IRA statements, tax returns and insurance policies—as soon as you know you are getting divorced.
Make a list of the accounts you hold jointly versus individually. This will allow you to take inventory of your entire financial picture.
“So many times, one spouse will take care of the finances,
DO complete a budget worksheet to determine your monthly obligations and assets. What does it disclose? Can you still afford your current monthly obligations on your income alone? Just because assets might be split in half, that doesn’t mean your expenses will be. A free Dupaco Money Makeover can help you review your financial picture and create a budget that works for you. “This is an important step as you approach this life-changing event, as it can destroy your credit, making it difficult to rebuild your future,” Kress says.
DO open individual checking and savings accounts to start putting aside funds and begin establishing credit in your name only.
DO review your credit. What’s out there in your name? You might see increasingly high credit card balances or a credit card you weren’t aware you had. A free Dupaco Credit History Lesson can help you review your credit history and restructure old and new debts. And with Dupaco’s Bright Track, you can continue to monitor your credit score at no cost through Shine Online and Mobile Banking.
DO update beneficiary information on your accounts, including savings and checking accounts, life insurance policies, retirement accounts and other assets. Update your estate-planning documents, including your will, executor and medical and financial power of attorney. “This is normally the last thing on your mind,” Kress says.
- DON'T -
DON'T rush into any major financial decisions. Big-ticket decisions—such as selling your home or car or going on a luxurious vacation—can wait.
“We allow emotions to take over in these difficult times,
DON'T be embarrassed to ask for help. Turn to family and friends, meet with a trusted financial advisor to review your finances and reach out to a trusted divorce attorney to protect your interests. If you are struggling with your monthly obligations and find yourself falling behind, Dupaco can assist with payment arrangements. “Remember you are not alone,” Kress says. “Dupaco is all about people helping people. Many areas of the credit union can assist you during this life-changing emotional event.”
By Emily Kittle