Divorces are challenging both emotionally and financially. However, by avoiding some of the most common financial mistakes made during divorces, you can at least eliminate a good portion of those financial concerns — and likely a lot of the stress that come with them.
The following are a few of those mistakes you should definitely avoid:
- Not tracking your expenses. You almost certainly know how much money you make every month, but do you really know exactly how much you spend? As you go through a divorce, it becomes significantly more important to know where your money is going on a monthly basis so that you can develop a realistic budget that takes into account your new situation.
- Believing equal means fair. The value of an asset is not necessarily the same as its market value. Understand that there are some assets that generate income, and therefore may be worth more to you than just their market value. Never agree to an equal split without doing your due diligence in analyzing the potential worth of assets and property.
- Ignoring liability for debts. Debts incurred during a marriage are the responsibility of both spouses, just as property collected during marriage belongs to both spouses. The credit card company will come after each of you regardless of what your settlement says, so to avoid damaging your credit, try to pay off your debts before finalizing the divorce.
- Focusing on the short term. While child support and alimony are important short-term considerations, you should also have an understanding of how your financial picture will look in the coming years. You might consider having a family law attorney or financial planner review potential settlement agreements before you sign them.
- Making rash decisions about the family home. Just because one parent has more custodial time does not necessarily mean he or she should keep the home. It can be an emotional decision to give up a house, but you have to consider whether doing so is realistic given your new financial circumstances.
For sound legal guidance as you go through a divorce, meet with the trusted Jacksonville family law attorneys at Combs Greene, PA.
Attorney Andrea Jevic contributed to this blog post.