How to Manage Your Money During Spousal Separation

Explore this Article

parts

1Getting Help

2Recognize Jointly-Owned Assets

3Handling Joint Debts

4Adjusting to a Separated Status

+Show 1 more...

-Show less...

Other Sections

Expert Q&A

Related Articles

References

Separation is not only emotionally difficult, it can create unforeseen financial stress as well. Suddenly, you no longer have another person to share expenses with. Instead, you might have to get a new apartment or try to pay your mortgage on your own. To get on firm footing, you should create a new budget and identify any expenses that you can cut. You should also talk with your spouse about how you will divide expenses. Your spouse can’t walk away from joint debts and obligations to the children, so you should draft a written agreement explaining how expenses will be paid.

Steps

Part 1

Part 1 of 4:

Getting Help

1. 
   1
   Visit a marriage counselor, if necessary. Your emotions might be running high, and you might find it difficult to talk with your spouse about your finances. In this situation, you should seek professional help. A marriage counselor can help you and your spouse listen to each other.

   • The purpose of the counseling isn’t to save the marriage. Instead, you will focus on tackling financial issues. Often, our emotions get in the way, and the counselor can help you stay on track.
   • You can find a marriage counselor in the Yellow Pages or on the Internet. You may also get a referral from your doctor or minister.
2. 
   2
   Meet with a family law attorney. An attorney can help you analyze your finances and understand where you will stand if you do get a divorce. You should hire your own attorney and not share one with your spouse. To find a family law attorney, contact your local or state bar association and ask for a referral.

   • You also might need an attorney’s help if your spouse doesn’t keep up their end of the bargain. For example, if your spouse continues to spend money from a financial account, then you can go into court and ask the judge to freeze the account.
3. 
   3
   Hire a financial advisor. You might need help untangling your finances or planning for the future. If so, then you should meet with a financial advisor. Try to find a financial advisor who has experience working with people during a separation or a divorce.

   • You should look for a financial advisor who has the Certified Divorce Financial Analyst (CDFA) designation.
   • You can find a CDFA by visiting the Institute for Divorce Financial Analysts website, which has a locator feature: https://www.institutedfa.com/find-a-cdfa. Enter your location and click “Search.”
   Advertisement

Part 2

Part 2 of 4:

Recognize Jointly-Owned Assets

1. 
   1
   Think about selling your house. You should decide quickly what you intend to do with your house. If you can’t afford it, then you should think about selling it. However, selling a house rarely goes quickly, so you want to give yourself plenty of time.

   • Alternately, you could rent out the house so that you can cover your mortgage payments.
2. 
   2
   Avoid making large purchases. If you end up divorcing, then you might need to divide any property you purchased during your separation. For this reason, you should avoid large purchases, like a new car. Wait until you are divorced.

   • However, don’t forget to treat yourself every now and then. Separation is emotionally draining on everyone, and if you need to visit a spa or play a round of golf to feel better, then go ahead and splurge.
3. 
   3
   Examine your investments. If you invest, then you should consider changing the allocation so that you have easier access to cash. You might want to sell certain holdings or change the mix in your investment portfolio.

   • You may also need to rethink your investment goals. One goal might be to save as much money for your children’s future college expenses. However, you may need to delay this investment if money is tight during the separation.
   Advertisement

Part 3

Part 3 of 4:

Handling Joint Debts

1. 
   1
   Decide who will pay debts. You remain responsible for any debts you took out as a couple. These debts can include car payments, house payments, credit card debts, etc. You should identify your joint debts and commit to making timely payments. If you don’t know what debts you have jointly, then get a copy of your credit report.

   • You can get a copy of your credit report by calling 1-877-322-8228.
   • Alternately, you could visit http://www.annualcreditreport.com and order a copy from each of the three national credit reporting agencies.
2. 
   2
   Close your joint accounts. Move quickly. Closing all joint accounts will prevent your spouse from running up bills on your credit cards or clearing out shared checking or savings accounts.

   • Before closing, make sure that all outstanding checks and debit charges have cleared. If they haven’t, then they’ll bounce if you close the account too soon.
   • You should be able to close a bank account on your own. Usually, you will present a photo ID to the bank official and possibly complete some forms.
   • To close a joint credit card, you should call up the credit card company immediately.
3. 
   3
   Establish your own accounts. If your separation becomes permanent, then you will need your own bank accounts and credit cards. It is best to establish them as soon as possible.

   • If you have direct deposit, then make sure to arrange for your deposit to go into your new account.
   • Even if you and your spouse reconcile, there is no reason not to have your own financial accounts.
4. 
   4
   Divide credit card debts. One easy way to divide credit card debt is for each spouse to take out your own new credit card and then transfer half of the debt as a balance transfer.

   • Usually, the credit card gives you 12 months or more at 0% interest, so you can pay down your debt quickly.
   • Communicate clearly before you do anything with the money you share. For instance, don't assume it's okay to pay off a credit card bill with money from your shared savings account.
5. 
   5
   Hire a credit monitoring service. If you don’t split the debts yourselves, then you are basically relying on your spouse to make their payments as promised. Accordingly, you want to keep track if they are really paying the bills. You should purchase credit monitoring.

   • You can often get credit monitoring services from one of the three major credit reporting agencies: Experian, Equifax, or TransUnion. Other companies include Identity Guard and LifeLock.
   • Credit monitoring services vary depending on the services they provide and their cost. For example, Identity Guard’s Total Protection Plan costs $19.99 a month and monitors changes to your credit reports across all three credit reporting agencies. It also tracks your Social Security Number across thousands of databases.
   Advertisement

Part 4

Part 4 of 4:

Adjusting to a Separated Status

1. 
   1
   Gather financial information. Drafting a budget is key to managing your money. Before you can begin, you need to gather all relevant financial information. Get the following:

   • utility bills (electricity, gas, phone, etc.)
   • credit card bills
   • bank accounts (savings, checking, etc.)
   • mortgage or lease
   • investment paperwork
   • tax records
   • insurance policies
   • childcare expenses (school, daycare, etc.)
2. 
   2
   Divide expenses. The easiest way to split expenses would be to divide everything 50/50, but that might not be possible. Another option is to split household expenses but to have each spouse be responsible for their own personal expenses like haircuts, student loans, food, etc.

   • When dividing household expenses, you can have each spouse pay a percentage based on how much they earn. For example, if one person makes $4,000 a month and the other makes $2,000 a month, then the first spouse will pay two-thirds of all household expenses.
   • Also identify new expenses. For example, if you need to move out of the house, then you will probably have a new rent payment. If you need to buy a new car, then you’ll have a new car payment. Don’t forget these new expenses.
3. 
   3
   Add up all sources of income. Identify how much you make at your job. Multiply your pay stubs by the number of pay periods in the year, or look at your most recent tax return. If you can earn overtime pay, then calculate that, too.

   • Separating can be expensive. If you decide to go through with a divorce, then you’ll also probably need to pay an attorney. Accordingly, you might need to find another part-time job, at least until things stabilize.
4. 
   4
   Find expenses you can cut. Compare your income with your expenses. If you can’t afford your new living arrangement, then you’ll need to go through the budget and cut anything that isn’t a necessity. Talk with your spouse about what you can cut. The following are good candidates for cutting:

   • entertainment expenses, like cable, Netflix, or Amazon Prime
   • expenses for eating out
   • wine and alcohol
   • vacations
5. 
   5
   Draft a separation agreement. You might not know how long you will be separated. However, in some states, you can get permanent legal separation. In this situation, you will need to draft a separation agreement, which is like a divorce agreement. Even if you think the separation might only be temporary, you should still get a written agreement.

   • In the agreement, you divide up debts and assets. The agreement is legally binding, which means that if your spouse violates it you can go into court and get a court order.
6. 
   6
   Ask for alimony, if necessary. Your spouse might be a higher earner than you. In this situation, you could ask for alimony, which is called “separate maintenance” because you are still married. Separate maintenance can be included in any separation agreement you and your spouse draft.

   • If you can’t reach an agreement with your spouse, you can also ask a court for temporary alimony.
7. 
   7
   Continue talking to each other. Even if you draft the most detailed budget, you will still have to talk with your spouse, especially if you have children. New expenses arise constantly—your child wants to play a sport, your child is injured, the home needs repairs, etc. Commit to keeping lines of communication open.

   • You also need to talk to your spouse if you decide not to follow the budget. For example, if you want to pay more on the mortgage, then run the idea by your spouse.
   • You may also want written permission from your spouse. This might seem too formal, but try to get an email at least in which they agree to the change.
   Advertisement

Expert Q&A

Search

Add New Question

• Question

  What should you not do during separation?

  

  Stacy Chretien, CFP®
  Certified Financial Planner

  Stacy Chretien is a Certified Financial Planner™ (CFP®) based in the Bay Area, California. With over 25 years of experience, she specializes in developing customized retirement and estate plans and developing tax minimizing strategies. Stacy has worked as a Certified Public Accountant™and a Financial Consultant. She has also worked with various financial services, real estate, and non-profit companies. She holds a BS in Business and Accounting from California State university, Hayward. Stacy has completed her Certified Public Accountant (CPA) designation, successfully passed the Series 66 exam, and earned her Certified CFP® certification.

  

  Stacy Chretien, CFP®

  Certified Financial Planner

  Expert Answer

  As you're getting ready to start the process of separation, don't make any major financial decisions—like selling your home—unless it's clear you're both on the same page. You want to make sure everyone knows where everything is in terms of finances.

  Thanks! We're glad this was helpful.
  Thank you for your feedback.
  If How.com.vn has helped you, please consider a small contribution to support us in helping more readers like you. We’re committed to providing the world with free how-to resources, and even $1 helps us in our mission.Support How.com.vn

  YesNo

  Not Helpful 0Helpful 0
• Question

  How do you split money during separation?

  

  Stacy Chretien, CFP®
  Certified Financial Planner

  Stacy Chretien is a Certified Financial Planner™ (CFP®) based in the Bay Area, California. With over 25 years of experience, she specializes in developing customized retirement and estate plans and developing tax minimizing strategies. Stacy has worked as a Certified Public Accountant™and a Financial Consultant. She has also worked with various financial services, real estate, and non-profit companies. She holds a BS in Business and Accounting from California State university, Hayward. Stacy has completed her Certified Public Accountant (CPA) designation, successfully passed the Series 66 exam, and earned her Certified CFP® certification.

  

  Stacy Chretien, CFP®

  Certified Financial Planner

  Expert Answer

  Consider having a mediator or attorney present. However, keep in mind that a mediator's fees may be far less than those for a legal representative.

  Thanks! We're glad this was helpful.
  Thank you for your feedback.
  If How.com.vn has helped you, please consider a small contribution to support us in helping more readers like you. We’re committed to providing the world with free how-to resources, and even $1 helps us in our mission.Support How.com.vn

  YesNo

  Not Helpful 0Helpful 0
• Question

  How do I separate myself financially from my husband?

  

  Stacy Chretien, CFP®
  Certified Financial Planner

  Stacy Chretien is a Certified Financial Planner™ (CFP®) based in the Bay Area, California. With over 25 years of experience, she specializes in developing customized retirement and estate plans and developing tax minimizing strategies. Stacy has worked as a Certified Public Accountant™and a Financial Consultant. She has also worked with various financial services, real estate, and non-profit companies. She holds a BS in Business and Accounting from California State university, Hayward. Stacy has completed her Certified Public Accountant (CPA) designation, successfully passed the Series 66 exam, and earned her Certified CFP® certification.

  

  Stacy Chretien, CFP®

  Certified Financial Planner

  Expert Answer

  Clear communication is important. Don't make assumptions on what is okay to do with any money you share. Also, don't make any big purchases or sales. You want to make sure everything stays static before you move forward with the separation.

  Thanks! We're glad this was helpful.
  Thank you for your feedback.
  If How.com.vn has helped you, please consider a small contribution to support us in helping more readers like you. We’re committed to providing the world with free how-to resources, and even $1 helps us in our mission.Support How.com.vn

  YesNo

  Not Helpful 0Helpful 0

Ask a Question

200 characters left

Include your email address to get a message when this question is answered.

Submit

Advertisement