4 Ways Women Can Financially Prepare for Divorce
According to the U.S. Government Accountability Office, when a heterosexual marriage ends, a woman’s income falls by roughly 41%, while a man’s income falls by just 23%. Preparing for this steep decline in your income is important.
1. Do Research and Make a List of What You Will Need
Unfortunately, getting a divorce can be expensive, and you’ll need healthy finances to get through it. Besides the living expenses you’ll need to get through the divorce, you’ll also need to set aside money for legal and filing fees. Fortunately, the more amicable you and your spouse are and the more communication there is between the two of you, the more money you can save.
In New Jersey, just to get started, you will need to file an official Complaint for Divorce with the court. This costs $325 if you have children and $300 if you don’t. If you decide to hire a family law attorney, you will likely pay an hourly rate multiplied by the time spent on the file. There are also other expenses that family lawyers incur and that you will eventually need to reimburse.
There are other fees to consider. If you own a home together, you may need to hire a professional appraiser to get the value of your home. If one person in the marriage owns a business, you may need an accountant to determine what the business is worth. The accountant will provide the court with a comprehensive report. You may also need expert help to divide your retirement account and any stocks that you jointly own.
2. Separate Your Finances
If you have had a joint bank account for years, you may not always be on top of what money is going into the account and what money is leaving.
However, if a divorce is on the horizon, there may be a situation where you have to separate your bank accounts and open up both a checking and a savings account for yourself. Maintaining the status quo is ideal, but the facts and circumstances will dictate the best approach. Get your credit report so that you can figure out if you owe any debts and if you owe any debts with your spouse. Take the important step of achieving financial independence.
If you have a joint retirement account, figure out how to divide up the money and separate the accounts. Each company has specific rules on what to do, so you’ll need to contact the company that has your retirement account and ask them to lay out the specific steps you’ll need to take.
A major issue, of course, is if you own a house together. You can decide to sell the house and split the money or you can decide who gets to keep the house. If the house still has a mortgage on it, whoever is keeping the home will have to refinance the mortgage in his or her name.
In New Jersey as is the case with most other states, the division of property in a divorce is governed by what is called equitable distribution. In general, only assets that have been accumulated during the marriage are considered for equitable distribution, but there are exceptions, such as the appreciation during the marriage of property that was initially separately owned. This does not mean that the court will divide all finances equally. It means it will be fair and on a case-by-case basis. Your divorce lawyer can provide more information on this matter, including what factors a judge will take consider when rendering a decision.
3. Get Your Finances in Order
The first thing you’ll want to do is take a detailed look at your finances. If you’re not working, it may be important to brush off your resume.
If you have a job already, take a look at your monthly budget to determine how much you will need to support yourself. This includes food, all your bills, your phone, internet connection, gas for your car if you have one, rent or mortgage payments, property taxes if you have them, home insurance if that applies to you, and car insurance. You may have been medically covered on your spouse’s health insurance. After a divorce, you will have to pay for your own health insurance. There are many options to consider in assessing your budget.
Once you have your monthly budget laid out, you must decide if it’s possible to pay all your bills without a problem. If you can’t, you’ll need to start chopping out the non-essentials. The basics you’ll need are a roof over your head, groceries, and money for transportation to and from your job. If you’re a remote worker and you work from home, you’ll need a laptop and an internet connection. However, remember that libraries and coffee shops provide internet connections, so you can cut your internet connection if you need to.
A divorce may also mean downsizing your home. If you need to move into a smaller space, you may need to get rid of some of your belongings or put them in storage. If you decide to put your items in storage, you’ll need to factor in a monthly storage rental fee into your budget. Talk to a divorce attorney to find out more about getting your finances in order. If alimony is an issue in your case, that will have to be addressed as well.
4. Start Living Simpler
Now that you’re looking at a divorce, you may have to adjust your lifestyle accordingly. This all depends on your marital lifestyle and your circumstances. Before, you were living on two incomes. Now, you will be living on just your own. There are many ways to make economic cuts to your daily life if needed. This may mean no more morning coffee at your favorite coffee shop, or it may mean ending your gym membership. You may also have to travel less, for example, or eliminate the monthly restaurant dinners. If you have children, they may be forced to drop their favorite activity or their allowance. Take a look at your magazine subscriptions, yoga payments, or even streaming services.
You may not need to change any part of your lifestyle, depending on the facts and circumstances of your case. In higher income cases, it will be important to capture the marital lifestyle, inclusive of savings, so as to ensure that you may be able to maintain a reasonably comparable one post-divorce. Contact a family law attorney if you’d like to find out more about financially preparing for a divorce.
Finding an Attorney to Help
Getting a divorce is hard at best. However, if you’re not prepared, it may feel financially insurmountable. In order to ease the blow, it’s important to do your research and begin making good financial decisions that will help you post-divorce.
When you need to contact a New Jersey divorce lawyer, contact us at Lawrence Law through our online form or call 908-645-1000 to set up an appointment with one of our family lawyers at our Watchung or Red Bank offices.