10 Foolish Money Tips
Divorce, Fool Style
February 18, 1998

1. Make a list of everything. Chances are that you may not even know what you own together... or owe together. And if you weren't involved in making the financial decisions, you've got a lot of learning to do. But that's OK, you've come to the right place. We've got tons of items in the Fool's School to help you get up to speed on taking control of your financial life.

First, make a list of everything you own. Include things like real estate, bank accounts, insurance policies, and retirement plans. Then make a list of everything you owe, from the phone bill to school loans. Write down everything about each debt, including addresses and phone numbers of contact people. Now make a list of your new expenses sans spouse. For a complete list of stuff you're going to want to keep track of, click over to this checklist, courtesy of Divorce Central.

2. Protect your privacy. If you are concerned that you may not be getting statements or bills that you will be liable for (because your ex may have access to your mail box), rent a post office box and have all of your financial mail sent there. If your spouse receives the statements for things like your brokerage account, ask your broker to send a duplicate statement to your new PO address.

3. Protect your credit. Make sure that you have credit in your own name. If you have always had a shared account with your spouse, ask your credit card company to issue a new card in your name only. Also, make an agreement with your spouse that neither of you will put any new large purchases on your card that you might both be liable for later.

4. Protect your kids. If your spouse has been given the responsibility of paying child support payments and is being negligent, nail his, or her, butt to the wall. Kids are always the losers in divorce. Don't let anyone make it even worse for them. If you spouse isn't paying, check out this link from the Administration for Children and Families for information on what to do next.

5. Protect your future. Make sure that you understand who will receive the retirement plans if you have a joint plan with your spouse. Different laws govern this depending on where you live. Check out Divorce Source's web site for details on the laws in your state.

6. Protect your ex-spouse's future. If your spouse is going to be paying for alimony or child-support, make sure that your divorce agreement stipulates that they also buy life and disability insurance. This will insure that these payments will continue should something unexpected happen to your spouse.

7. Protect your investments. Always split any securities you own straight down the middle. Just because they look equal on paper doesn't mean that they will remain that way should they have to be liquidated. Some investments have more capital gains than others, while some are difficult to sell at any price (like a limited partnership).

8. Don't forget inflation. When making plans for the future it's best to include a provision for inflation. That $500 a month in child support won't be worth the same amount in 10 years.

9. Invest in your earning potential. Your earning potential is your single most important asset. If you're concerned about your financial future, make an investment in it. Go back to school and learn a new skill if you have to. Not only will it give you something to do, make you feel better about yourself, and make you more marketable, but you might even meet someone you like!

10. Do the best you can, then let it go. Chances are you're afraid that you're going to get the short end of the stick in your divorce settlement. Perhaps an inequitable relationship was one of the reasons you're divorcing. Divorce counselors all agree on one thing: make the best deal that you can for all involved and then let it go. Try forgiving your spouse and yourself. Then get on with your life. You've still got a lot of living to do and your new life is just about to start!

-- Trudy Bowen (TMF Hoyden)