Sometimes the drama of a divorce can sidetrack employees from paying attention to their personal finances, including adequately saving for retirement. To keep individuals on track, the nonprofit group Take Charge America recently released personal finance tips for dealing with a divorce.
"Individuals going through a divorce are often so caught up in the emotional aspect that they neglect to do their homework, and many wind up in a financial nightmare," says Mike Sullivan, director of education for Take Charge America.
Here are some tips from the group to ensure financial health after the dissolution of a marriage:
- Update personal documents - Make sure to update insurance policies, retirement plans and beneficiaries so that you are solely in control of your assets. Some employers require that this information be changed as soon as there is a separation in the marriage, so it is important to review your policies early in the process.
- Lock down everything financial - Close all joint credit card accounts, savings accounts and investments. It is extremely important to know what assets you have secured and what you stand to lose.
- Now is the time to reestablish credit and open new accounts in just your name. It is a good idea to order a credit report and address any issues immediately. Keep a close eye on it to make sure that no new credit is opened under your name.
- Knowing where you stand with your credit score and your assets will help to ensure a less costly divorce by keeping individual expenses down.
- Reorganize finances - Finances that were once joint efforts are now your sole responsibility. Compare the bills you took over from the divorce to your current income, and then create a new budget.
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