Divorce will alter your financial circumstances in a number of ways, so it’s critical to have a clear understanding of where things are headed and what you can do to maintain a sense of stability.
There are hundreds of money-related mistakes you can make before, during and after divorce, but these five are among the most common:
- Talking about money too soon: You’ll have plenty of time to discuss the details of your divorce, such as who gets the family house, in mediation or when your case moves to court. If you attempt to discuss this with your spouse shortly after deciding to divorce, bad blood will almost always move to the forefront.
- Keeping the same budget: Even if your income will remain the same, your budget is likely to change. For instance, if you’re ordered by the court to pay child support and/or alimony, it’s imperative to work it into your budget.
- Making big purchases: This is tempting during divorce, both out of need and the desire to make yourself feel better. Even if you know that you need to make a big purchase, such as a car, do your best to put it off until your divorce is finalized.
- Neglecting to think about the future: The decisions you make now will impact you down the road. An example of this is someone who gives up all their retirement accounts in exchange for other assets. It may sound like an okay idea during divorce, but you’ll regret it at some point.
- Doing it all yourself: There are times when you need to consult with a professional, such as a certified public accountant (CPA), financial planner or appraiser. It costs you money now, but the advice and guidance you receive is well worth it.
If you’re successful in avoiding these money mistakes in divorce, you’ll feel better about where things will stand after the process is complete.
Should you slip up along the way, don’t dwell on your mistake. Learn from it, adjust your approach and then take steps to avoid the same situation in the future. With the right knowledge and an understanding of your legal rights, you can come out for the better in the end.
