If anything costs more than getting married, it’s getting divorced.

Divorce can be an expensive process, and if you’re not financially prepared, the cost of going through it can spiral out of control in a hurry.

Planning ahead can make the transition much smoother and prevent financial catastrophe in the aftermath of your breakup. Whether you’re the spouse initiating the divorce or the one left holding the bag, following these five strategies can help you get through this difficult time without losing your shirt in the process.

The Complete Divorce Financial Planning Checklist

Divorce has emotional, physical, relational, and financial consequences. Most of these consequences are challenging to go through, but creating a plan can help you overcome those challenges. Before you go through the planning checklist below, it’s important to have information on hand.

Know your assets and debts. This is the first step in financial planning for divorce because you need to know what you’re working with. Gather up all of your financial documents and make a list of everything you own (assets) and everything you owe (debts).

Then, determine what you need and what you want. Once you know what you have, you can start thinking about what you need and want in a divorce settlement. What kind of lifestyle do you want to maintain? What kind of debt are you willing to take on? How much money do you need to support yourself?

When you know what you have, what you need, and what you want, you’re ready to take on the financial challenges of getting divorced. Here’s a checklist to help you out:

1. Get Your Finances Organized in Detail

Most people don’t have a great handle on their finances. Studies show that:

Only 32% of Americans have a financial plan, and just 24% hire a financial planner.
Financial illiteracy costs Americans $415 billion per year.
People who score low in financial literacy make 25% of their mortgage payments late.
At all income levels, women save less than men.
Women have about ⅓ the savings of men.

An astonishing 55% of Americans say they don’t check their bank balances regularly because doing so gives them anxiety. This can be especially true during and after a divorce. But knowing what you have, where it is, and how to access it is critical to managing your life effectively.

Organizing your finances in detail will help you know your actual financial standing, which can make the process of financial planning for divorce much smoother.

Here are Five Strategies to Help Get Your Finances Organized:

Gather all financial documents in one place. This includes tax returns, bank statements, investment accounts, debts, and assets.
Get copies of your credit report from all three of the major bureaus. Each year, you can receive one free credit report from each agency — Experian, TransUnion, and Equifax.
Review your insurance documents. Your insurance policies are as much a part of your financial picture as your investments or your bank accounts are.
Create a digital file. You may have some documents in paper form, but increasingly, financial institutions rely on digital documentation. Make sure you are tracking everything in an easy-to-use online format.
Use a budget app and track your spending. Take an inventory of all current monthly expenses, including debt payments and other financial obligations. It’s also important to take stock of your net worth, including liquid assets (cash) savings, stocks/bonds/mutual funds, business equity/property value, and retirement investments.

Why is it important to know your financial standing? First, if one spouse has made significant financial contributions to the marriage or is taking care of children from the relationship, he or she may want some consideration when it comes time for property division. Also, knowing where you stand right now can help ensure a fair division of assets and make sure your child support and/or alimony agreement is equitable.

2. Know How to Handle Debt During a Separation

Credit cards, student loans, car payments, and mortgages are everyday financial realities for millions of American households. The average credit card debt stands at $6,270, and 40% of student loan holders aren’t making payments. Car loan holders owe an average of $26,162 on their vehicles, and mortgage debt in America totals $10.3 trillion.

All that debt belongs to someone, and no one is going to write it off for you just because your marriage dissolved. In fact, one of the most important aspects of financial planning for divorce is understanding how to handle debt.

Did you know that any debts incurred during the marriage are joint debts? Both parties are responsible for paying them off. Yes, even if your partner used that one credit card and you never touched it, you are still responsible for that debt. In practice, however, a judge could order one party to pay more than the other.

Sometimes, if you’re the one who is responsible for paying off the debt, you can negotiate with your ex to have them pay a portion of it. Another option is to refinance the debt in your name only. This can be a good idea if you have a good credit score and can get a lower interest rate.

Before you do either of these things, though, talk seriously with your financial advisor. Most issues with creditors can be resolved more easily than you may expect.

3. Stay Calm About Credit Cards

CNBC reports that 20% of Americans are afraid to check their credit card statements. That’s mostly because interest rates have skyrocketed, but consumers haven’t quit spending. Scary, right?

What’s even scarier is that credit card debt follows you through your marriage and separation all the way to the ultimate dissolution of your relationship… and beyond. In fact, it hangs around like a household pet until you pay it off.

Therefore, one of the most important things to do during a divorce is to keep your credit separate from your ex-spouse. You will need to close any joint credit cards and open new ones in your own name — or better yet, cut them all up and operate on a cash-only financial system.

You should also make sure to keep up with the payments on your cards, as missed payments can damage your credit score. If you are having trouble making ends meet, consider contacting a financial planner or credit counseling service for help.

Most importantly, don’t approach credit card debt from an emotional perspective. Debt — and assets — are math problems that require logical solutions. Emotion-driven responses to financial concerns usually do nothing more than turn molehills into mountains.

4. Understand the Mortgage Process

If you’re going through a divorce, one of the first things you’ll need to do is figure out what to do with the family home. Do you sell it? Live in it? Keep it and rent it out?

You have a lot of factors to consider, but one of the most important is your mortgage. Here’s a quick rundown of what you need to know about the mortgage process during divorce:

A mortgage is a loan that uses your home as collateral.
The lender gives you money to buy the house.
You make monthly payments to the lender over a set period of time, usually 15 or 30 years.
The amount you paid toward your loan’s principal is called equity, and your partner probably has a stake in that.
If you default on the loan, the lender can foreclose on your home.
A mortgage is a legally binding contract entirely separate from your divorce decree.

In a divorce, houses are often the biggest area of concern after children. If you decide to sell the house and split the equity, you’ll need to determine who pays for repairs, realtor fees, and other costs. If you decide to transfer the house into a single spouse’s name, you’ll need to make sure that both the mortgage and the title go into one spouse’s name — so you don’t wind up paying a mortgage by yourself and co-owning a home with your ex.

As always, consider the tax implications of every asset you own, especially one as valuable as your home.

Many people don’t know the ins and outs of the mortgage process, but it’s important to understand before you get divorced. Don’t try to do this by yourself. A tax professional, mortgage broker, appraiser, attorney, and financial advisor all need to weigh in on an issue this big.

5. Know When to Ask for Help

No one gets married expecting to get divorced, but unfortunately, it happens. If you find yourself in this situation, you’re probably feeling a range of emotions, from anger and betrayal to sadness and fear. And on top of all that, you have to figure out the financial side of things.

At Bridge Divorce Strategies, we’re here to help you. Call us for a chance to find out how we can work with you to protect your finances and your family’s future as you navigate your path from here.