How to Handle Your Money Like a Boss After Divorce

Post-divorce, you get to make all the decisions.

There's a lot to unpack during and after a divorce, both emotionally and financially. Whether you're married to someone of the opposite sex or in a same-sex marriage, divorce typically results in a decrease in household income for both parties.

Time is your friend in terms of healing emotionally and financially, but there are things you can do to handle your money like a boss in the meantime.

Take care of joint accounts

First and foremost, if you haven't already, close all joint accounts held with your ex. This includes bank, credit card, and brokerage accounts. Leaving even one account open could open you to liability if your ex-spouse overdrafts the account or runs up charges on a credit card.

If you're carrying a balance on your credit card, decide if you have the funds to pay it off. If not, contact the credit card company and ask them to suspend the account so that no future charges can be made. Confirm with the company that your ex has no way to reopen the account.

You're going to need both a bank account and credit card account in your own name. Which one you takes care of first depends on your specific situation. For example, if your credit score isn't great, but your ex has strong credit, you may consider applying for a credit card before closing your joint bank account or existing credit card accounts.

Once you've closed the joint checking account, open one solely in your name. Do the same for the brokerage account.

Other moves to make

There's a lot to keep track of, but focus on these moves after closing joint accounts.

Secure your data and important documents

If you have a safe deposit box, remember to go through it and take anything that belongs to you. Set up a new box in your name. If you shared a computer with your ex but don't plan to take it with you, destroy personal files and delete personal information from internet browsers.

Ensure your name is changed (and assets are retitled)

If you plan to change your name after the divorce, you'll need to update the Social Security Administration with your new information. Any assets you leave the marriage with should be retitled in your name alone (and if your name is changed, they should be in your new name).

Secure your future financial security (and that of your dependents)

Now that you're not married, you'll need to make changes to your will. For example, you may want to name someone other than your ex-spouse as your power of attorney for healthcare and finances.

Changing beneficiaries should also be very near the top of your list. After all, you don't want your ex to end up with your 401(k), IRA, pension, or life insurance proceeds. Fortunately, you can typically change beneficiaries by filling out a simple form.

As a single person, it's more important than ever to have an emergency fund. Work toward saving six months of living expenses and stash it in an FDIC-insured bank account that earns interest. A money market account (MMA) or high-yield savings account are both secure options.

Focus on insurance

You'll need to buy new auto and homeowners insurance in your name. If you're comfortable with the insurance company you used when married, your first option is to call them. However, you may find that you save money by shopping around to learn what other insurers can offer.

Now that you're on your own, you'll need to ensure that you can get by financially if you're laid off from your job or become ill. Disability insurance provides you with a monthly check if you can't work. Although it's not cheap, it can protect your finances and credit score in an emergency situation.

Talk to the experts

It's a good idea to meet with a financial planner. An independent financial planner can help you reconfigure your retirement savings plan. Knowing how much you'll need to save for retirement is a key step in creating an accurate monthly budget.

You may also want to meet with an investment advisor. An investment advisor will weigh your goals and risk tolerance to help you create an asset allocation that can meet your goals without causing you stress.

Check your credit report

Order a free copy of your credit report from all three major credit reporting bureaus through a site like annualcreditreport.com. Once they arrive, go over each report line by line, looking for any errors. For example, if one report indicates that you still owe money on a credit card you paid off last year, that's a mistake you want to be corrected. If you do find any errors, dispute them with the credit reporting agency in question. They must either prove that the information is correct or remove it from your report.

Don't lose hope

A surprising amount of work goes into becoming settled post-divorce. There is some good news, though. Citing a study from Fidelity Investments, Reuters reports that by five years after a divorce, most people feel like they've recovered from both the psychological and financial blows they experienced.

Until that time, you're in the driver's seat. You now have the opportunity to mold and remold a financial plan that reflects your goals. As tough as it may seem at first, you've got this.