NEW YORK (MainStreet) Divorce is not just an emotional split; it's also a financial one. For many people, the emotional trauma is so great during divorce that finances often get pushed to the back burner. One of the most important things you can do is separate the emotional and think about divorce as a business transaction. Understand your legal and financial options so that you will be better equipped to protect your interests and take charge of your future.
Julie Arkush, a financial advisor at Morgan Stanley in New York, offers the following important financial guidelines for those going through a divorce:
1. Pay Attention to Credit
Paying attention to credit is particularly critical during and after divorce.
One of the first things you need to do is establish credit cards, savings and checking accounts in your own name. Eventually, you will want to close joint credit cards and accounts, but until that happens, you can contact any joint creditors and ask that any future charges by your ex or soon-to-be ex be stopped. As long as you have joint accounts, any actions by your former spouse can affect your credit rating.
You should also check your credit report. There are three primary credit reporting agencies that monitor your credit: Equifax, Experian, and TransUnion. Each scores and reports your credit slightly differently, but you are entitled to a free credit report from each agency once a year. Simply go to the government approved website: www.annualcreditreport.com and check your credit report for errors. You have the right to correct them and you should do so as quickly as possible.
2. Create a Budget
Know your spending habits. Even if you did not have a formal budget while you were married, now is the time to get one together. Additionally, if you are in the middle of the divorce process, determining a detailed and accurate pre-budget can be an indispensable negotiating tool when reaching a settlement.