Most couples recognize that divorce is an emotionally trying process, full of complexities and potential pitfalls. Yet many underestimate the financial devastation that it can cause. True, most couples come out of divorce with a settlement, and some can recover from any damage that was done. There are others, however, that may struggle to find their footing again. Often, this can be prevented by understanding and avoiding the most common money mistakes made during divorce. Know what they are, and how you can effectively prepare for them.
Failing to See the “Bigger Picture”
Grief is a normal part of divorce, and to be expected, but you also have to see the bigger picture. Divorce is not just a severing of your marital union and relationship; it is also a business transaction, a division of property and assets. Though looking at it this way can seem cold, it can help you avoid the common arguments that couples get into – often out of vengefulness – during the process. It can remind you that the financial aspect of it is not meant to be personal.
Not Getting Joint Debts Out of the Way
More than likely, you and your spouse share at least one joint debt. Maybe it is the mortgage, the car, or a joint credit card. Whatever it is, work on paying it down or completely eliminate it now, before the divorce happens. Though it may be split in divorce, requiring you and your soon-to-be ex-spouse to both make contributions to the balance, it can also be a major point of risk. Take, for example, a joint credit card account. If you transfer it over to your name but your ex-spouse is supposed to help pay down the balance and then stops paying, you may be stuck with their portion of the payments. Alternatively, if your ex-spouse keeps the card open and fails to pay, your credit will be negatively impacted.
Continuing to Live on More Than Your Own Income
If you still have access to your spouse’s assets, it can be tempting to continue dipping in to fund your weekly visits to the nail salon, pay the bills, or make important purchases. Unfortunately, giving into this temptation can put you on a difficult path. Rather than learning how to live within your new means, you are letting the extra fall onto your spouse. That will no longer be available to you once the divorce happens. So, as difficult as it seems, start living within your divorced, single-again budget now.
Our Divorce Lawyers Help You Plan for the Future
One of the smartest financial moves you can make during a divorce is to ensure you hire an experienced attorney. It might seem counterproductive, especially since you will be tacking on attorney’s fees, but it can save you a lot of time and money in the long run. For example, a mistake on your divorce settlement could cost you well over what you would have paid for an attorney. To add to that, you would then have to go back to court to fix the problem, which can often be more expensive than the original divorce itself. The only thing worse is when you make a mistake that does irreversible damage – and that can and does happen, a lot more often than you think.
At Sullivan Taylor, Gumina & Palmer, P.C., we protect your financial future, and your best interest in divorce. Skilled and committed, our Naperville divorce attorneys will listen to your concerns, answer all of your questions, and provide candid answers to ensure you know what to expect, and how the decisions you make will impact your future. Schedule your initial consultation with us today to learn more. Call 630-665-7676.