Don’t Make These Money Mistakes During And After Divorce
The financial costs of divorce can be significant. While the median amount needed in the country is around $7,000 to cover attorney and court costs, it doesn’t take much for that number to balloon to something much less pleasant—with complex, contested divorces reaching the tens of thousands of dollars. What’s more, all too often people make foolish, impulsive decisions that make this period of life even more costly.
Develop a New Financial Plan
It may be a major relief to be able to put that whole dreadful marriage behind you, but it doesn’t mean you can throw financial responsibility out the window. Sure, the joint goals you shared with your ex are a thing of the past, but your future requires some goals and planning. Now is the time to set both short- and long-term financial goals, and to begin working toward them before you burn through what’s left of your money. And you’ll have to do some smart thinking when it comes to money management and dealing with the aftermath of divorce.
Don’t Fight for a House You Can’t Afford
You have emotional attachments to your home—that’s understandable. But can you afford the mortgage and upkeep? Think about the insurance and taxes, too. It’s entirely possible that selling the home and splitting any proceeds will be a better way to move forward for both parties.
Shopping Therapy is Not a Good Solution
The divorce may have left you feeling as though you’d been run over by a bus. So it may feel pretty darn good to blow a few hundred bucks on new clothes—or several thousand dollars on a new motorboat or SUV—but when the bills roll in you may find them to be nothing short of burdensome. So stay away from emotional, excessive spending that will only depress your spirits down the road.
Don’t Quit Your Job to Avoid Having to Pay Alimony
Are you willing to live in poverty just to prove a point? Because chances are you’re going to wind up with more time in court, more expenses, and more stress if you go down this road. Better to suck it up and make the payments assigned by the court.
Don’t Sell Investments to Pay Bills
The bills may be escalating during and after your divorce, but it’s never a good idea to cash out your investments in order to pay your monthly obligations. For starters, your bills will keep rolling in after the investments are gone. For another, you may get hit with some hefty taxes on those sales. You’re better off finding a way to live within your means, either by cutting back on living expenses or by picking up a second job for a while.
Don’t Dip into your 401K
Again, you are justifiably frustrated with your new financial circumstances now that two households are being supported instead of just one. But when you withdraw these funds, you could be taxed heavily, in addition to being assessed penalties of 10 percent if you’re 59 ½ or younger. Try to find another way to deal with your financial situation.
Advocating for You
The dedicated and knowledgeable Boca Raton family law attorneys at WiseLieberman are committed to providing informed and solid guidance throughout your divorce. For a confidential consultation, contact our office today.