As we move through the latter stages of the pandemic, many couples are resuming their plans to end their marriages. These plans were placed on pause during the pandemic, which explains why there was a decline in divorces in the year 2020.
When a heterosexual marriage ends, women still tend to experience the larger drop in income, with women’s household income falling by 41% while men’s fall only 23%, according to research by the U.S. Government Accountability Office. If you have been considering moving forward with a divorce post-pandemic, listed below are five critical steps all women should take to be prepared financially for this stressful transition. As a financial adviser who has also experienced divorce, these steps helped me begin my own transition.
1. Reflect and take action
Take some time to reflect on your situation so that you can move to the acceptance phase of realizing your marriage has ended. During this time, you should research and gather a team of professionals you are going to need, such as a marriage counselor, divorce attorney, financial adviser and tax professional. Having a team of these professionals will empower you to move forward with the next phase of your life. In addition to the above, I also started seeing a therapist, which helped me to mentally face every step of the divorce process.
2. Open your own bank accounts
If you don’t already have checking and savings accounts in your own name, now is the time to open them. You should start by having your full paycheck auto deposited into your new accounts. During this time, you could just transfer the funds needed to contribute to the house expenses until the divorce is final. This is the first step of getting into the habit of managing your own finances. I found this step to be critical because I was able to regain control of my finances early-on. The account-opening process can also be time consuming, so it’s best to start as early as you can.
3. Begin building your credit
You may have credit card accounts that are jointly held. Now it is time to build your own credit by getting a credit card in your name. This is also a good time to apply for your FICO credit score from all credit bureaus so that you will know how creditworthy you are when it comes to making those larges purchase, such as buying a home or a car. I am proud to have been able to purchase my own home while still owning a home jointly with my ex-spouse. It was my pay history and credit score that granted the approval.</…….