5 Steps to Dividing Your Finances in a Divorce
Divorce brings with it a steep learning curve. One of the areas that causes lots of stress for divorcing couples is money. Not only payment for the process of divorce, but how to divide assets in a way that meets the needs of the entire family.
If one spouse has always handled the finances for the family, the other spouse may feel particularly in the dark. How does one even begin to know what to ask for when dividing assets?
You are the expert in your own life
The first thing to remember is that you are the expert in your own life. Whether you’ve been paying the bills or not, you have the most intimate knowledge of your own lifestyle and needs. If you are the primary caregiver for children, you are also the expert in their lives.
You’ve been an adult for years now, and if you look back you’ll see that you’ve juggled many complicated aspects of life. The logistics required to keep a household stocked with toilet paper, food, and shoes that fit your kids is no small feat. If you have a career, you know what it costs you - at least theoretically - to get to work in the right clothing at the right time.
Remind yourself that you are capable and knowledgeable. After all, the main topic on the table is your life and future wishes. Who could make better decisions about that than you?
5 Financial Categories to Consider
When it’s time to get technical and create a financial map of your life, it may help to consider the following categories. Even if you don’t know the amounts that correspond to each category, you certainly know what falls into each one:
Expenses. Think groceries, utilities, insurance, and rent or mortgage payments - list anything that comes up every month.
Income. Do you and your spouse both work outside the home? Do you have any secondary sources of income such as rental properties, trust funds, or an online Etsy shop?
Property. List all the property you own. It may just be the family house, but don’t forget vacation homes, rentals, cars, investments, or undeveloped land.
Children. Most of the kids’ needs were probably listed in the “expenses” category, but this is a good place to list out all the aspects of your kids’ lives: school, extracurriculars, medical needs, individual interests.
Quality of life. Think about your current standard of living. Ask yourself: what do I need from the first four categories to feel emotionally and financially stable? What can I expect from my spouse while also considering their ability to remain involved with my kids and maintain their lifestyle?
Mediation can help
Even though you’re the expert in your own life, it can still help to have a professional guide you through the more nitty gritty aspects of the divorce process. There’s a lot to cover. For example, where will you each live and how will you pay for it? Will you need to sustain a mortgage on your own or take steps to qualify as a renter? Mediators are an excellent option.
In contrast to lawyer-led divorces, mediation allows the divorcing couple to maintain constructive communication over the way their life is about to change. Division of assets and child custody arrangements are left up to the couple, recognizing that they know best when it comes to their own lives.
Mediation transforms the role of lawyers from that of expensive advocates into knowledgeable consultants. You can consult with them and other experts when you need them and save precious resources when you don’t.
Mediators do not take sides or suggest solutions. Instead, they facilitate fruitful discussion between the two parties to help them arrive at a mutually acceptable divorce agreement. They often have tools to help both spouses figure out the financial side of divorce, like a monthly expenses spreadsheet or a list of trustworthy financial advisors.
At Haas Mediation, we strive to help couples retain maximum agency over their life during a divorce. If you’re interested in learning more about how we can help, schedule a free 15-minute phone call today.
Interested in learning more?
- Andrew Haas, Founder & Principal Mediator
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