Reimaging Your Finances During and After a New Jersey Divorce

Divorce marks a profound life transition, including financially. Many individuals – especially those who played what might be called a secondary role in household financial management –find themselves needing to refashion their financial identity during and following a New Jersey divorce. There are a number of facts, factors, and tactics to bear in mind when it comes to reimaging your finances during and after a New Jersey divorce

Understand Your Financial Starting Point

Before you can reclaim your financial identity in the atmosphere of divorce proceedings and post-marriage life, you need to fully understand your current financial situation. This necessitates the gathering of a variety of necessary documents that include:

• Bank statements
• Credit reports
• Tax returns (last 3–5 years)
• Retirement and investment account statements
• Mortgage and loan documents

You will also need to create a complete inventory of assets and debts. Understanding what you own and owe is foundational for establishing your financial independence during and following New Jersey marriage dissolution proceedings. Many divorcing individuals are surprised by the true state of their finances. This can particularly be the case if one spouse historically managed most of the household money. In the final analysis, the more clarity you have, the stronger your starting position.

Establish Financial Independence Immediately

One of the first concrete steps to take control of your divorce-related financial identity is to separate your finances from those of your spouse. The process begins by taking a number of basic steps:

• Open a checking and savings account in your name only
• Establish your own credit card (if you don’t already have one)
• Update direct deposit information for your income
• Change online passwords to financial accounts

Even before the divorce is finalized, these steps can help you begin reclaiming fiscal autonomy. Make sure you also remove your spouse from joint accounts or close them entirely where possible. Keep in mind that shared liability can linger and negatively affect your own credit going forward into the future.

Rebuild or Establish Your Credit

For many, credit is a central part of individual financial identity. If your credit history is tied heavily to your spouse or you personally have what might be called a “thin” credit file, rebuilding credit is essential. The process starts with several specific steps:

• Request your credit report from all three bureaus (Equifax, Experian, and TransUnion)
• Dispute any errors or outdated information
• Open a secured credit card if necessary
• Pay all bills on time and keeping credit utilization low

You do need to keep in mind that your personal credit score will impact your ability to rent or buy a home, finance a vehicle, or even qualify for some jobs. Reestablishing a strong credit identity enables you to move forward confidently and independently.

Create a Post-Divorce Budget and Financial Plan

Your household income and expenses will likely change significantly once you divorce. You absolutely must craft or create a realistic post-divorce budget is crucial. Factor in a number of key elements that include:

• Housing (rent or mortgage)
• Utilities and transportation
• Health insurance and medical expenses
• Child support or alimony payments (in or out)
• Daycare or education costs
• Savings and retirement contributions

A strong financial identity includes clear priorities and the discipline to follow a personalized financial plan. 

Clarify and Protect Your Long-Term Financial Goals

Divorce can derail previously shared goals that include:

• Retirement
• College savings for children
• Real estate plans. 

When the process of ending a marriage commences, this becomes the time to reassess long-term financial goals. Reclaiming your divorce-related financial identity involves defining what you want for your financial future, which may be different from the past.

Start by listing your goals. Commonplace examples of goals include such things as home ownership, retirement age, travel, savings for children. Determine what steps are needed to accomplish these objectives. On a related note, make sure to update beneficiaries on life insurance, retirement accounts, and estate documents.

Cultivate Confidence and Embrace the Opportunity

Finally, in the end, reclaiming or reestablishing your New Jersy divorce financial identity is about more than numbers. The process is also about self-worth and self-trust. Many divorcing individuals struggle with a variety of complex emotions that can include guilt, shame, or anxiety around money. These emotions magnify if financial abuse, secrecy, or inequality were present in the marital relationship.

When it comes to your finances during and following a New Jersey divorce, you have fresh opportunities that include the ability to:

• Earn and manage your own money
• Set your own financial priorities
• Build a legacy for yourself and your children
• Free yourself from past financial entanglements

There are resources that can assist you during and after a New Jersey divorce include groups, therapists, and divorce coaches that can help you address emotional blocks around money. Keep well in mind that the more you believe in your ability to thrive financially, the more that belief will guide your decisions and fuel your success. If you have any questions regarding a New Jersey divorce, call the Law Offices of Peter Van Aulen at (201) 845-7400 for a free divorce consultation today.