You have probably heard people say that divorce is costly. And this is spoken in truth. On average, the cost of an uncontested annulment is between $5,000 and $15,000, and if you are seeking a contested divorce, the cost could be even higher.
One humorous meme says, “ At least divorce is less expensive than the wedding.” So there can be a light-hearted take on the headache of getting an annulment, but the question remains, how do you financially prepare for a divorce?
Well, there is good news. You can do a few things to prepare yourself for the financial burdens of ending your marriage. By following the tips mentioned below, not only will you save money, but you will be able to lay the groundwork for a stable financial future.
Tip 1: Speak to the experts
The first step in preparing financially for any divorce is to chat with the experts. Seeking help from a financial planner is a great idea. They can work through your financial statements with you and help you create a budget.
A budget will help you see what money comes in and what money goes out. This will also help you cut down on unnecessary spending. If there are areas in which you can cut down on spending, you could instead use that money to save for your divorce.
Tip 2: Get Organised
When it comes to getting an annulment, there is tons of paperwork involved. Financial analyst Susan Campbell suggests gathering all your financial documentation as soon as possible. Depending on which state you live in, you might need to acquire tax returns, credit reports, insurance policies, banks and brokerage fees, and proof of your assets and debts.
By organizing your financial documentation, you will be able to decide on how much spousal support is needed and exactly how assets and debts need to be divided.
Tip 3: Think about the future
If you are not used to handling your finances, now would be a good time to start. Save every receipt for the next six months. It will help you figure out how much your lifestyle actually costs.
Even if something seems insignificant, make a note of it. Eventually, you will see how much money is spent each month. It will give you an accurate idea of what life will cost after your divorce.
You will also need to add rent, gas, medical, and any other expenses that you might incur while single. By thinking realistically about the future and how much it will cost to live alone, you will feel more prepared.
You may realize that your salary won’t be enough to cover your living expenses. If this is the case, you might need to take on extra work or find a new job that pays more. You might also need to adjust to a more frugal style of living.
This can be tough, but remember that by simplifying your lifestyle, you will have less stress. By trying to keep up with an elaborate lifestyle, you might incur unnecessary debt. So try to keep things simple until you are fully back up on your feet.
Tip 4: Check your credit report
Many people don’t know what their credit status is. It’s important to know where you stand in the eyes of financial institutions, as a good credit rating can help you in many ways. It will make it easier to buy a car or even rent a home.
Go online and have a look at your credit report. It will also show you which debts your spouse has perhaps created in your name that you might be unaware of. If you see anything on your report that seems suspicious, talk to your attorney.
Tip 5: Get your own bank account and credit card
It is imperative to close any joint credit accounts that you and your spouse might have. This stops a vindictive ex from spending all your money on your credit card and leaving you in debt.
By opening up your own bank account, you can become financially independent from your soon-to-be-ex.
Tip 6: Save as much money as you can
Divorce can be incredibly expensive, so try to save as much money as you can. Begin to save even before your annulment. Start a year in advance if you can. Saving money can be hard, especially if you are already struggling financially, but every cent helps. Try to set up an automatic transfer at the start of each month to your savings account. It will force you to save some money every month.
You could also try to take on extra work or sell homemade items to make extra money to save. Saving will help you with future divorce fees, but having some money set aside for when you are single can take a ton of stress off your shoulders.
Tip 7: Try cutting down on the cost of your divorce
There are many ways to cut down on spending during your divorce. One of the best ways to do it is by having an uncontested divorce. An uncontested divorce is more affordable than going to trial. With an uncontested annulment, you can also use an online divorce service.
An online divorce service is a company that prepares all your paperwork for your annulment. All you need to do is fill out a questionnaire about your case, collect your supporting documentation, and file it in court. Some packages are incredibly affordable. Complete Case is a great company that offers professional service at a fraction of an attorney’s cost.
What are other ways in which you can save money during your divorce?
Use a lawyer only when necessary
Only use a lawyer when necessary and don’t spend hours at each meeting. Lawyers charge per hour, so the cost of your divorce can add up relatively quickly. You could always get the paperwork online and have a lawyer read through your documentation to make sure it is correct.
You could also use paralegals to help you with any questions that you might have or to send emails and so on. They will be cheaper than using a lawyer.
If you and your spouse can’t agree, use a mediator. It will be much cheaper than going to trial. A mediator can cost a maximum of $1000, and in most cases, mediators help couples come to an amicable agreement within a few hours.
Hire the right professionals
Before hiring someone, make sure that they know what they are doing. Hire the right real estate appraisers, mental health professionals, and so on. This will help you save money. When you hire the wrong people for the job, it could end up costing you more cash in the long run.
Tip 8: Keep a clear head and a calm heart
Divorce has a way of blurring rational lines. You might want to keep your family home, but it might be costly to look after a large house on one income. Scaling down to a more manageable home could save you money. Maintenance of a larger home can cost a lot of money over time, and sometimes one salary might not be enough to cover all the extra expenses. Try to take the emotion out of your decisions when it comes to finances.
Another important thing that many divorcing couples forget is that your lawyer is not your psychologist. If you need someone to talk to, speak to a trusted friend or relative. A lawyer will charge you for every hour spent in their office, so try to keep things strictly business. It will help you prepare for stable finances during your annulment.
Preparing financially for a divorce may take some work. It can be exhausting, but the benefits will last a lifetime. You will learn specific skills that can help you save money in the present and keep a stable financial future.