When you get a divorce, a lot of things become new. You’re learning how to cook for one less person and you’re tackling weekend projects solo. It’s usually not a problem adapting to things post-divorce, but is everything that easy? Financial mistakes happen often after divorce. Because of the new situation, many are not prepared. Below, we’ll discuss the most common financial mistakes those new to divorce make.
Financial Mistakes During Divorce
Equal Division of Property
Sometimes it is not as easy as simply cutting it down the middle. When dividing up assets, make sure you keep in mind the residual values and not just current market values. Common financial mistakes often include divisions of property because of their complexity.
For example, you and your ex spouse may own two properties that have a $200,000 value. One is the family home and the other is a rental property. Each spouse getting one of those homes would not be equal because the rental property will continue to generate income. Remember these aspects when dividing property and other money-generating assets.
Expenses
Expenses can hit a newly single person like a ton of bricks. Don’t let your expenses be one of your post-divorce financial mistakes! Take the time to understand how much you make each month, after taxes. After figuring this out, create a budget and stick to it. After you’ve adjusted to a single income, start planning for the future. Remember that most expenses grow, not lessen, as time goes on.
Child Support Reliance
Relying on child support means relying on your former spouse to make money. If you have concerns about their finances, make sure you avoid the financial mistakes associated with child support. Take the necessary actions to secure this piece of income.
Additionally, the court will allow you to request disability or life insurance for your ex. Doing so will insure that you are financially secure should a catastrophe happen. Keep in mind that people can cancel a policy at any time. If you are worried about this happening, you can request a court order for your ex-spouse to make the appropriate payments.
