Divorce is both emotionally and financially taxing. Amidst the emotional roller coaster, you may be tempted to get back at your soon-to-be ex and, thus, take your eyes off what really matters – your life after the divorce.
Finances can be a contentious subject during divorce. After all, you are probably moving from a two-income household to a single-income household. Fortunately, you can take certain financial steps to prepare yourself for life after divorce. Here are some of these steps:
Consider having a budget
While you were married, you probably pulled your resources together and shared household bills. But since you are about to go your separate ways, you are certainly going to rely on your income to maintain your household and possibly pay other obligations like child and spousal support.
Coming up with a budget ensures that you keep track of your finances and live within your means.
Understand the tax implications of divorce
During the divorce, marital property will be divided per Ohio marital property laws. Thus, if you end up with property that appreciates in value, and you decide to sell it, chances are you will need to pay capital gains taxes. Consequently, this may diminish the value of your settlement agreement. Understanding the tax implications of the divorce can help you know what to fight for during the property division case.
Maintain a stellar credit report
Be sure to scrutinize your credit report to understand every item therein. The last thing you want is to discover long after the divorce that you and your ex had a joint obligation (like a joint credit card) that has since negatively impacted your credit.
This also explains the importance of terminating any joint credit cards that you hold with your spouse as soon as you resolve to end the marriage.
Protecting your interests
Divorce comes with a range of legal, personal and financial implications. Taking strategic steps to prepare your finances for life during and after divorce can help you dissolve your marriage without punching a hole in your pocket.