Divorce is complicated emotionally, legally, and financially. Many of the decisions you make during the process, especially financially can affect you for decades. A simple mistake can hurt your ability to save for retirement, buy a new home or care, or move on with your life.
Focus on these three tips to prevent common financial mistakes during divorce.
- Keep the big picture in mind.
It's easy to forget that divorce is ultimately a business transaction, you have to keep the big picture in mind. Prioritize the issues most important to you, and let go of the smaller battles.
Even in a simple divorce, you might have to pay attorneys, financial experts, therapists and other professionals. Many expenses come from needlessly fighting over small concerns, which are inconsequential to you in the end.
Maintaining your focus should help you keep in-person conversations, emails or phone calls with your attorney brief. Each correspondence adds to your billable hours. You should discuss topics like the emotional aspects of divorce with your therapist, not your attorney.
You also might want to consider working with a Certified Divorce Financial Analyst.
- Pay down joint debt quickly.
You probably share at least one account with your soon-to-be-ex-spouse. No matter what it is, if your name is on it, you're legally liable for the debt- even if you ex-spouse is required to pay joint debts as part of the divorce settlement.
Try to pay down any joint debt with joint marital assets with you're still married, and then close or freeze those accounts. Otherwise, your credit could be impacted if your ex-spouse fails to make a payment.
- Maintain a lifestyle you can afford.
You might not be able to have the lifestyle you became accustomed to when you're single. Trying to maintain it after the divorce can be a major financial mistake. Develop a clear budget that takes into account your new income, expenses and lifestyle needs.
Focus on your future.
To move on with your life after divorce, you have to prepare yourself financially. This means being proactive about avoiding common financial mistakes and doing your best to work efficiently with your divorce team. You'll be in a better financial position when the process is over. Read the full article to learn more about your financial future after a divorce.
If you're facing a divorce, figure out your financial position and avoid money mistakes with David Veliz at Veliz Katz Law.