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Money Management International Improving Lives Through Financial Education
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Managing Money During a Separation

MMI Copywriter

By Kim McGrigg, MMI Community Manager

The majority of people who divorce cite financial problems as a contributing factor. Ironically, the financial problems that result from divorce may be even more severe. While it may be hard for people involved in an emotionally-draining divorce to clearly think about their money, it is absolutely imperative.

The first financial action after separation is to pull a copy of your credit report. You will want to review entries carefully and either close all joint accounts or change them to individual accounts. Alert your secured lenders of your marital status and instruct them not to allow any changes without your permission. You may also want to “freeze” joint bank accounts or divide any funds into two individual bank accounts.

To avoid future problems, develop a plan to pay off your debts prior to your divorce. This is important because your divorce decree is an agreement between you and your spouse—not your creditors. The contracts you signed with your creditors cannot be changed by a divorce decree; therefore, whoever is responsible for the debt during the marriage may still be obligated after the divorce. Your responsibility will ultimately be dictated by state laws. Since state laws vary quite a bit, you may wish to discuss your rights with a reputable divorce attorney.

After your divorce is final, it is wise to allow time to pass before making any major financial decisions. In the meantime, there are a few things you should do in order to move forward financially.

Determine necessary financial tasks. Get a firm grasp on your financial situation. Determine a procedure to pay bills, make deposits and withdraws, get cash, and pay taxes.

Locate important documents. You will need to locate important papers such as tax returns, insurance policies, birth certificates, mortgage documents and social security cards.

Create a new spending plan. Changed circumstances call for a changed budget. Note differences in income and expenditures and adjust your spending accordingly.

Set goals. Most likely, your experience changed your financial priorities. Decide what you would like to do with your money and put a plan in place to make your goals a reality.

Most importantly, enlist the help and support from your family, friends, and community.

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Building Financially Stable Relationships

 

Money may not be able to buy love, but being financially stable can definitely help you stay in love. In fact, according to a recent survey by Money Management International (MMI), 56 percent of married couples who are unhappy indicate financial issues as their reason for dissatisfaction. In addition, 50 percent of respondents named “lack of job security” as the deal breaker in a relationship. Significantly more women than men named “job security” as a deal-breaker.

For those looking for love, MMI’s survey results are a clear call to action: getting your finances in order now will not only make you a more attractive prospect, but will help build a healthy relationship. For those already in a relationship, take the opportunity to recommit yourself to building a stronger and more financially secure partnership by following these helpful suggestions:

Open the lines of communication. No matter how unromantic, having an open and honest discussion about your financial past and future is vital to your financial success. Approaching money issues honestly and openly gives you a much better chance at a strong, healthy financial relationship.

Make a commitment. No one cares more about your financial security than the two of you. Make a promise to each other to take joint responsibility and take steps to better your overall financial position by paying down debt and establishing a savings cushion.

Establish goals. Setting goals and keeping them are two different matters. It’s important to create goals that are both specific and achievable. Make sure your goals are equally rewarding so that you’re both working towards the same goal. Depend on each other for support, and encourage one another to stay focused and committed.

Spend quality time. Schedule a time to meet each month to discuss your financial goals and expectations. Review your budget regularly in order to identify problem areas. Don’t be discouraged by the occasional setback. Make adjustments as often as needed to ensure financial success.

Because money matters, it’s important for couples to devote more time to improving their financial standing. Love and Money, a free downloadable eBook from MMI, is filled with more ideas and tips on striking the right balance between your relationship and finances.


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About Money Management International

Money Management International (MMI) is a nonprofit, full-service credit counseling agency, providing confidential financial guidance, financial education, counseling and debt management assistance to consumers since 1958. MMI helps consumers trim their expenses, develop a spending plan and repay debts. Counseling is available by appointment in branch offices and 24 hours a day, 7 days a week by telephone and Internet. Services are available in English or Spanish. To learn more, call
866.530.9869 or visit MoneyManagement.org.


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