If you are going through a divorce, gathering a support team can be an important part of successfully navigating the process. Finding out how to meet your legal and emotional needs during what can be a tumultuous time will help you weather the storms ahead and come out better on the other side. Did you know that getting your finances in order can also be a critical part of the divorce process? Unfortunately, many people take the potential financial consequences of divorce for granted and are not prepared as a result. This can be a difficult lesson to learn and have negative impacts on your financial health and well-being indefinitely. So, in order to help you come out of the divorce in the strongest possible position, we will review some of the most common financial mistakes to avoid during divorce.
Common Financial Mistakes to Avoid During Divorce
Regardless of who handled the finances over the course of the marriage, when it comes to divorce, you need to have a thorough understanding of the financial situation of both yourself and your spouse. While a history of not participating in managing the finances can be difficult to overcome, you must do what you can to learn as much as possible about the finances. This means getting access to, reviewing, and making copies of key financial statements for accounts held by you, your spouse, or jointly. Understanding the financial landscape of your marriage will help you see what type of debt you may be responsible for and what type of assets you may receive or pursue in the divorce as well as what type of income and financial resources were necessary to support your quality of life enjoyed during the marriage.
Understanding the financial state of your marriage may also help you in developing a thorough budget. One of the biggest mistakes people make when going through a divorce is not putting a budget in place for life during and after divorce for both the near future and the more distant future. The move from a two-person household to a one-person household can have a bigger financial impact than some anticipate. Expenses may remain the same, but now there is only one adult responsible for covering them.
To build a budget, outline your monthly expenses and how you will cover them. Account for inflation and taxes. Build out your budget over the years to account for things such as when you will receive alimony and when you may stop receiving alimony. There may be other changes in circumstances to account for. For instance, you may need to pursue more education and job training in order to get a job or increase your earning potential. This type of pursuit may mean more income in the future, but it can place a financial burden on you in the short term that you need to account for.
At the Law Office of Ronald L. Freeman, we offer dedicated divorce counsel that looks to protect your best interests during and after divorce proceedings. We are here for you in this difficult time and beyond. Contact us today.