Advertising

7 Ways To Protect Your Assets During A Divorce

Advertising
7 Ways To Protect Your Assets During A Divorce

According to statistics, nearly 40-50% of marriages in the U.S end up in a divorce. Besides being immensely stressful and emotionally draining, a divorce can also wreak havoc on your finances for many years to come. Here are a few tips to help you protect your assets during a divorce.

1. Assess Your Liquid Assets

It’s easy to become emotional during a divorce and attach sentimental value on keeping the house or car. Instead, you’ll want to focus on assessing the value of joint liquid assets such as savings accounts and investment portfolios. Receiving the house during a divorce proceeding may not be as financially advantageous as it may seem initially if you can’t afford the property taxes and upkeep costs. Finding a buyer can also be a hit or miss depending on the current real estate market.

Advertising

Make sure to assess the value of your assets correctly. For example, the value of an investment portfolio of stocks and bonds may fluctuate drastically over time. The value of a vehicle will also depreciate with time. You may want to focus more on assets that are less depreciable depending on how risk averse you are.

2. Consider Taxes When Appraising The Value Of Your Assets

Many people going through a divorce appraise their assets incorrectly because they forget to consider the tax implications on investment and retirement accounts. A retirement account is worth less than the stated balance because of the deferred tax payment owed upon withdrawal. If a party chooses early withdrawal, he or she will also be hit with a penalty in addition to taxes.

Advertising

3. Protect Your Credit Rating

Both parties will be held responsible for joint account credit card debt accrued during the marriage. It’s a good idea to pay this debt off and close the accounts as soon as possible.

You will also want to obtain a credit report from the three main reporting agencies; Equifax, Trans Union and Experian. This will let you know the status of each account on your credit report including if it is a joint or individual account, the current balance and payment history.

Advertising

If you have joint accounts you’ll want to pay them off and close the account. If you’ve added your spouse as an authorized user on any individual credit cards, you may want to contact your creditors and have them removed as a user.

4. Look For Hidden Assets

We like to think of our spouses as honest people but it’s actually quite common for individuals to hide their assets throughout the duration of a marriage. A business owner may add a friend on the payroll in order to hide income. Securities may have been sold without being accounted for.

Advertising

According to Los Angeles divorce lawyer Steven Fernandez, “Lying during divorce proceedings is against the law. When someone signs a Financial Affidavit, which is a formal disclosure of finances, he or she is swearing under perjury to disclose any and all information pertaining to income, assets, and expenses.”

5. Revise Your Will & Designated Beneficiary

If you don’t want your ex to receive any funds in case of your demise you’ll need to update your will. Getting divorced doesn’t automatically void your existing will. You may also want to update beneficiary information for any retirement, life insurance, and investment accounts if you don’t want your ex inheriting all of your hard earned assets.

Advertising

6. Be Careful When Dating

Never move in with someone you’re dating before your divorce is finalized since this may affect spousal and child support payments. A judge may deem you as having more money available if you are splitting living costs with another person. If you do plan to date, keep it discreet. Dating during divorce proceedings may also fan the fire and cause your spouse to become more emotional and less cooperative.

7. Change All Important Passwords

Change the log-in and password for your online banking account. Your spouse may have access to old passwords and may be logging in to see what you’re up to and keep track of your expenditures in order to use it against you in court. Some spouses go as far as installing a key logger in order to monitor their ex’s online activity. Protect yourself by changing your password and installing anti-virus softwares that will be able detect spyware.

More by this author

Jacqueline Cao

Entrepreneur

6 Microsoft Outlook Add-Ons For Businesses 8 Tips To Safeguard Your Child’s Financial Security 11 Ways To Get Better Customer Service 10 Home Improvement Gadgets Everyone Should Have 10 Ways To Add Volume & Body To Fine Hair

Trending in Money

1 Financial Freedom is Not a Fantasy: 9 Secrets to Get You There 2 40 Healthy And Really Delicious Meals You Can Make Under $5 3 Life Insurance: A Secure Way To Protect Your Future. 4 How To Save Money On Groceries: 13 Quick Tips 5 10 Investment Tips For Beginners

Read Next

Advertising
Advertising

Last Updated on July 20, 2021

Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

Advertising
Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

Have you ever considered your life now, and how it would be if you had more time to spend with your family and less worries about money?

Nowadays, financial stress is one of the most troublesome weights in life. If you’ve ever encountered financial stress, you know the difficulty of not having enough income to pay your obligations or bills.

Many people say that money is not the ultimate goal of life. While that’s true, money certainly plays a very significant role. The meaning of financial freedom changes with the different phases of our life, but ultimately, it is something that many people strive for.

In this article, we’ll explain how to capture that financial freedom you’ve been looking for. Read on to learn the secrets to financial freedom.

Break Free of Your Finances

Financial freedom is about having a constant flow of cash from your assets to cover all your regular needs.

When you are not worried about your income, or living paycheck to paycheck, you gain a great sense of freedom. It’s the freedom to be obtain and do what you truly need to make your way through everyday life.

Gaining financial freedom, though, is a process of growth, making small improvements and gaining emotional strength.

Though it seems hard to believe, it is really very simple to get financial freedom.

To do so, you simply need to make sure that your assets exceed your liabilities. In other words, you’ll need to find the sweet-spot where your residuals meet or surpass your expenses. This is something that you can achieve with the proper plan.

While not every person will accomplish financial freedom, the potential for anyone to do so is certainly there. Anyone can achieve this success, regardless of their income level.

Advertising

Outlined below are 9 secrets that will help you in your goals of achieving financial freedom.

1. Stop Unnecessary Spending

We often spend money inwardly, instead of objectively.

For example, you may spend when you’re anxious, depressed, restless, exhausted, from fear of missing out, or to please others. This is a very unhealthy way to handle your finances.

To stop this habitual spending, log down all your spending over the course of a month.

Just as some people keep a food diary, keep an expense diary. Remember not to just write down how much and what you spent the money on, also include the circumstances of why you spent the money. Was it an impulse buy at the checkout line or was it something you planned to purchase?

This increased self-awareness could enable you to avoid triggering situations in the future when you are considering an impulse buy.

2. Plan a Monthly Budget

This is a great opportunity to get serious.

Take a seat with your spouse or partner and make a monthly budget based on your income, not your expenses. You are never again going to spend more cash then you have on hand.

Overspending is the thing that led you to more financial obligations. Make sure you decide every month what is coming in and what will be going out and stick to that budget… no matter what.

3. Cut-up Credit Cards

Perhaps you are the type of person who always pays your credit card balance in full before the end of your billing cycle, and enjoys the reward points you gain. If this is the case, then you’re already way ahead of the game.

Advertising

If not, you may want to consider ridding your life of the burden that credit cards bring.

Many cards have strategies set up so that if you make a certain number of late payments, they will raise your interest rate much higher. This can really add up in the long run and you won’t be doing your financial situation any favors. If you’re prone to late payments or have a large balance due on your cards, cut them up!

Without proper self control on credit card spending and payments, you are basically throwing your money away. To ensure that you have better control over your spending, use only cash or debit for all future purchases (and don’t forget to pay at least your minimum payment on your cut-up cards each month!).

4. Increase Savings

There is no doubt that for a comfortable retirement you must accumulate satisfactory savings throughout your working life.

It’s good practice to save up to 15% of your income.

Start with your workplace 401(k), if you have one. If not, a Roth IRA (if you are eligible) or a traditional IRA (if you are not eligible for the Roth) are the next logical steps.

Increase in longevity means you might be able to look forward to 25 to 30 years in retirement, or possibly even significantly more. Investing now in good retirement plans will ensure that you have a guaranteed a stable monthly income when the time comes to stop working. [1]

5. Invest Wisely

Consider investing in funds.

Specifically, you will gain higher returns if you invest in different types of mutual funds such as Debt funds, Equity funds and Hybrid funds with a proper balance, although it absolutely relies on your personal preferences and sense of risk taking.

To get the most of these benefits, make sure you are investing in a variety of assets. Another resource of investing in mutual funds is SIP (Systematic Investment Plan) where you invest some money every month in funds. SIP works by averaging the per unit price of the stock.

Advertising

Mutual fund investors are aware of the benefits of an SIP (Systematic Investment Plan). For one, it is the most secure way to invest in equity mutual plans so that wealth is created over a long period of time. This plan also helps you to gain a better sense of financial discipline, which will come in handy in all your financial endeavors.

6. Invest in Gold

There isn’t really a better way to invest in gold than to have the physical gold itself in your possession.

You can purchase gold coins and bars from mints as well as from coin dealers and other private sellers.

Another way to invest in gold is through ETFs (Exchange Traded Funds).

These are is similar to mutual funds but they are exclusively investments of gold. ETFs are great because they offer more liquidity; the ETF owns the actual physical gold, stores it, and retains the value of the shares. These shares can then be bought and sold in the stock market, and one big benefit is that the transaction costs of gold ETFs are much lower than the that of physical gold.

With its consistently-increasing demand, investment in gold can be very wise long-term investment to make.

7. Stash Emergency Funds

Whether it’s a cash gift or a work bonus, always try to save any extra money that comes your way rather than making unneeded purchases.

If you get paid every other week, you’ll get an “extra” paycheck (three rather than the usual two) twice a year. Either save those paychecks towards your emergency funds or utilize the money to pay down other obligations, such as loans, credit cards or other debts.

Make it hard to get your cash.

Put your savings in an alternate bank, maybe an online bank that forces you to delay for several business days before transferred money hits your regular bank account.

Advertising

8. Find Fabulous Mentors

Find a mentor, such as a friend or family member, who has exceptional control over their finances and pay attention to everything they do.

If you do not have any friends or family that are enjoying financial freedom, then find a mentor online! There are numerous blogs and guru websites featuring the advice of many people who have reached financial freedom, and they exist primarily to let you in on how to achieve it for yourself.

There are also plentiful forums available that share tips and tricks on how to best achieve financial freedom. Read as much as you can and start changing your habits for the better.

9. Be Extra Patient

Patience is the key of financial success.

Being patient can be quite tough, especially when you’re struggling with your finances, but having faith is worth it. You’ll continuously be on the right track if you are taking the proper steps above.

So don’t be discouraged, even if you are only saving a few dollars a month; it all adds up. Within just a few years you’ll look back proudly at your accomplishments and be glad that you had the patience to get there.

Financial Freedom for All

Anyone can achieve financial freedom, regardless of their financial circumstance.

Use the tips provided above to get yourself on the track to financial freedom and toss your monetary concerns out the window. If you wish to achieve a life with financial freedom for yourself and your family then you must adopt a disciplined approach towards your finances.

Following the simple secrets above is a great start to making your money work for you, so you can work less and live more!

Featured photo credit: rawpixel via unsplash.com

Advertising

Reference

[1] Hartford Gold Group: IRA Retirement Accounts

Read Next