Divorce is a difficult undertaking. During those tough times, it is not unusual to make costly financial mistakes that can have long-term consequences.
Here are financial mistakes that you need to avoid during the divorce process.
Failing to think long-term
If you share children or are approaching your retirement, there are long-term expenses that you need to keep in mind during the divorce process. If you share a child, one of your primary goals during the divorce should be to ensure that your child will receive the financial support they will need. And if you are approaching your retirement, it is important to understand how the divorce will disrupt the existing financial structure.
Holding on to the house you cannot afford
The family home is usually one of the most contested assets during the divorce. It is not unusual for one party to consider buying out the other party’s share of the home. While this may seem like a great idea, it is important to consider the long-term financial implications of keeping the home after the divorce. Can you afford to pay for the home with a single source of income? Will you afford the home’s maintenance costs, property taxes as well as other costs? Be sure to ask these questions when claiming the home.
Failing to negotiate a realistic settlement
There is no doubt that divorce can be emotionally draining. However, you should never negotiate a divorce settlement without having a complete understanding of your family’s financial situation. It is absolutely necessary that you have clear financial records during the divorce. This is crucial for property division purposes, financial planning and tax preparation. Additionally, be sure to have accurate information regarding the household’s income as well as the monthly expenditures. Armed with these, you will be able to negotiate a realistic settlement during your divorce.
During the divorce, you will have several decisions to make. Find out how you avoid costly mistakes that can hurt your finances during the divorce.