I thought I’d talk about an elephant in the room today: money. I know a lot of people who wrestle with their relationship with money and I’m totally sympathetic to that, but like anything, the more you focus on a thing the better you get to know it – and knowing what to do about your money is never a bad thing.
I’m going to talk about taking simple steps to make sure that your money is where it needs to be directly after separation or divorce. I’m not a certified financial professional. I’m just a person who has been through it, and I needed this advice when I was going through separation and divorce. I had so much going on, I couldn’t think straight. So consider this, Money 101.
In this episode, we talk about…
[1:13] The first steps to separate your finances from your ex’s finances
You’re going to want to terminate joint accounts. Close your joint accounts as soon as possible, because you don’t want to be liable for any trip to Aruba that your ex puts on your joint credit card. Open your own account. If you don’t have one, and even if you are amicably splitting, this is a very empowering and important thing to do.
While you’re at it, it’s also a good idea to change your passwords for everything. Next, you will want to change the beneficiaries on all of your accounts that you had set up with your ex. This includes insurance policies, IRAs, your will, and any trusts. If your ex was a beneficiary on any account, you can replace your ex’s name with your children’s names, and then choose someone who could administer these accounts in case you are unable to do so. That can be a sibling, a cousin, a family friend, or even an attorney – just make sure you trust them.
[2:13] Empowering yourself financially by creating a budget
One of the best ways to empower yourself financially is to see how much money you have coming in to really understand where and how you spend your money. I like using a program like QuickBooks, because it helps me get really deep into the details about where my money goes and then I can budget better. Some bank and credit card companies have tools on their websites to help map out the categories your spending falls into – like how much goes to utilities, travel, food, etc. The better picture you have of your spending, the better you can plan.
Money is not a mystery; it’s a reality. Numbers in your bank account are actual facts, and those facts are important to your well-being and your kids’ well-being. So don’t be afraid of getting to know where your money goes.
[3:02] Getting your bank statements and documents in order
The more documentation you have, the easier it will be to prove what belongs to you should the need arise during a high-conflict divorce. If you need help with budgeting or want to talk with someone about getting out of debt, I recommend looking into the National Foundation for Credit Counseling. It is a not-for-profit organization that has free or low-cost programs to help educate people about their finances. They also have a very good debt consolidation program if that applies to your situation.
[3:34] Building your financial team
Get to know the people at your bank, and find someone you connect with there. Be frank with them, tell them what is going on, and ask what to do next. You also have permission to get your own accountant. If you feel that you’re being talked down to, or if you don’t understand what they are talking about, you have every right to find someone who is willing to treat you with respect. Your bank may have a list of referrals. Other sources include your local Chamber of Commerce, the Better Business Bureau, Yelp, and Angie’s List.
You might also want to choose a financial advisor. Your bank may have services to help you set up savings and money management vehicles, or you can go to a consumer-friendly investment manager like Charles Schwab. They actually have a good podcast about money, so you can learn more while you’re driving to work if you want.
[4:40] Making sure you get the child support that you deserve
According to a report from the United States Census Bureau, fewer than half of all parents in the United States get the child support that they are owed. If you need support, please contact your local child support office.
Again, I’m not equipped to give you a lot of advice about money, but I can talk to you about empowerment. The more you know, the more empowered you will be – and you deserve it, solo parents.