In the wake of a divorce, emotions are raw and judgment often clouded. While it may be difficult to think clearly and rationally, doing so can help protect an individual’s financial future. The following are three things that everyone going through a divorce should keep in mind while in the midst of a divorce.
Be selfish: While it can be tiring and emotionally-draining to sort out finances and personal belongings, don’t let fatigue or guilt be the leading factor in any decision-making process. Individuals often make concessions because they are tired of the whole process only to regret agreeing to certain terms down the road. When it comes to a divorce settlement, it makes sense to be somewhat selfish and really contemplate the impact of each and every decision.
Devise a budget: It’s difficult for many divorcing individuals to adjust to their new financial reality. Many find their monthly income cut by more than 50 percent and must adjust their spending accordingly. Failing to devise and stick to a budget can quickly lead to massive amounts of debt. Along with adjusting standard of living, individuals who have children should also set realistic expectations. In an effort to counteract feelings of guilt, parents going through a divorce often spoil their children. Spending extra time with the children, however, will benefit them more in the long run than any material possessions.
Know your debts: Get a firm and clear handle on what debts are owned and don’t make any assumptions. Request a credit report to determine what joint accounts remain open and work to pay and close them. Also, even if the rights to a home or property are signed over to an ex-spouse, individuals must make sure their name is removed from the title. Failure to follow up on debt matters can leave an individual financially responsible for their ex-spouse’s debt.
Source: The Huffington Post, “The Five Worst Divorce Mistakes…And How To Prevent Them,” Suzanna de Baca, July 13, 2012