In a divorce, you have to consider many aspects of your life in an entirely new light. You must determine what to do with your marital residence. You must look at your other assets with fresh eyes, deciding which spouse can keep what. And you must consider how your divorce will affect your financial life.
Your divorce will no doubt affect your finances significantly. You must make smart decisions to keep your savings and investments intact. It is important to avoid some of the common financial errors that people make during their divorces.
- Dipping into savings or investments to pay bills
Some people choose to cash in their investments or withdraw money from their retirement accounts to pay for their current bills. While this is sometimes necessary, you may wish to consider other options first. You may face tax penalties when you sell your investments, and you may need these funds in the future. Consider payment plans, taking out loans or borrowing from friends and family.
- Paying more support than necessary
If you still hold your spouse in fond regard, you may feel tempted to pay them more spousal support than necessary. After all, you want to help them get back on their feet after the divorce, and you were the breadwinner during your marriage. But this can be a mistake. It is important to keep your own finances in mind and obtain a support arrangement that benefits you. Conversely, if you are seeking spousal support, do not simply settle for the first offer—negotiate the highest amount possible.
- Going it alone
During a divorce, you may feel isolated, lonely and confused. These feelings can be amplified if you are attempting to finalize your divorce on your own. Instead, you may wish to seek outside counsel to help with the legal process and guide you through the end. You can also seek support from financial advisors, mental health professionals and religious leaders.