By Shawn Leamon
Learn more about Shawn on NerdWallet’s Ask An Advisor.
Separating from your spouse puts many aspects of your life in limbo. It’s unsettling to have your marriage — and your emotions — in an uncertain state.
There’s an additional area that is in limbo during a separation and is sometimes overlooked, and that’s your finances. Even though you may have physically split from your spouse, your money is still very much connected.
Separation is not easy, and proper planning of your finances is essential to help smooth the transition. Here are three tips to keep your finances in order while weighing major changes in your life.
1. Prepare new budgets
One of the first things to do when separating is to prepare a new budget. If you are physically separating you are splitting one home into two, which means new expenses to consider for at least one partner, such as rent, gas bills and the internet. You may have two homes to pay for instead of one, as well as possible divorce expenses. If you are the primary wage earner, you may pay for not only existing expenses like the mortgage, but also your spouse’s expenses. Prepare a budget to determine how you can best afford separating, including how to reduce unnecessary expenses.
You may not be able to enjoy your previous lifestyle, which makes understanding your finances so essential. A clear budget will help you understand your financial picture as an independent person and provide a glimpse into how your life may look if the separation becomes permanent.
2. Communicate about finances
Discuss with your spouse how you will be splitting the bills while separated. If you are both at the stage where divorce is the likely outcome, discuss whether you are financially able to begin the divorce process now or whether it would be better to stay separated for the time being.
There could be financial reasons to stay married for a time. Remaining separated, rather than immediately divorcing, means you will be able to file joint taxes and continue to share health benefits, so it might be the option that makes financial sense.
At the same time, separation can have important legal consequences should you get divorced. For example, marital assets are often valued at the date of separation, and any property acquired after separation — assets or debts — is considered separate, not marital property. You need to know your state’s laws to determine what you should do.
Consult a family law attorney in your state to help you properly navigate the legal elements of the separation process. This person could even help you draft a formalized agreement that indicates who is responsible for what. While such action may sound drastic, these signed agreements can protect you later should circumstances change.
3. Reduce joint debt
Although you may be separating from your spouse, your debt is still married. You must continue to pay any joint debt accounts that you have in your name. Check your credit report for a list of those accounts, such as credit cards, and consider closing them as soon as possible. Keeping joint credit cards open could be dangerous because you are still responsible if your spouse splurges on a big-ticket item.
In general, you should do your best to become financially independent by setting up checking accounts and credit cards in your name only. You will need these accounts if the separation becomes permanent, and they can help protect your money if you decide to get divorced.
During your separation, it is critical to efficiently manage your finances. With careful planning and strategic communication, you can make the process smoother regardless of whether the two of you reconcile.
This story originally appeared on NerdWallet.