When your marriage ends, dealing with your new financial reality can be one of, if not the most difficult thing to come to terms with. Not only will you have to learn to live on half (or less) of your former income, but you will also have to find a way to pay for the extra costs of divorce, such as a new residence, court and legal costs and other expenses.
As such, there are several common mistakes that divorcing spouses make during and after the divorce process. Avoiding or minimizing these costs and common mistakes can set you and your family up for financial success for many years after your split.
- Maxing out your credit cards. If you are dealing with a shortage of cash flow, it can be tempting to put all of your bills and expenses on your credit cards. While this will solve the problem in the short term, it will only hurt you in the long run when you are faced with high, unmanageable credit card bills. Look for other ways to make ends meet that don't involve credit cards, such as borrowing from family or friends or taking out a divorce loan.
- Spending money on insignificant legal issues and arguments: Sometimes, divorcing spouses can get entrenched in the fight and forget what it is they're really fighting for. Let go of your desire to win and focus on coming out of a divorce in the best possible financial situation.
- Not understanding your financial options: As previously stated, there are much better ways to make ends meet than maxing out your credit cards. Your family law attorney should be able to recommend a few.
Source: The Huffington Post, "Top 5 Ways to Ensure Financial Security During your Divorce," Brendan Lyle, April 23, 2012
Comments: Leave a comment