Going through a divorce is an emotional process, and it’s natural for these heightened emotions to affect every aspect of your life. Unfortunately, when it comes to handling your finances, actions swayed by turbulent emotions can have long-lasting effects. The more you understand what is going on, though, the better able you will be to avoid making costly financial mistakes.
Interestingly, a recent piece on the Huffington Post discussed the most common financial mistakes made during divorce and how people can avoid making them. The most compelling points in the article have to do with mistakes made because of emotional exhaustion and mistakes made because of denial.
The conflict during the divorce process can understandably wear people down. At some point, people can become emotionally exhausted and just not want to deal with any more conflict. Consequently, when assets are divided, they may end up giving away too much, just to get the uncomfortable process over with.
To avoid this problem, the column advises parties to be acutely aware of any temptation to give away more than is fair. Specifically, it urges parties to think of their long-term financial wellbeing and always be willing to stand up for themselves and fight for a fair distribution, even if it feels emotionally uncomfortable in the short term.
Another common problem stems from being in denial. Divorce brings drastic changes that take time to become accustomed to, and, as a coping mechanism, people may try to deny the full extent of those changes. That can result in overspending if a spouse’s income post-divorce is significantly less than it was during the marriage. The remedy here, the column advises, is to draw up — and stick to — a budget.
To learn more about traditional dissolution of marriage, divorce mediation or property division, contact an experienced and skilled legal professional.
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This post is for informational purposes only and is not to be construed as legal advice.
The Huffington Post, “The five worst divorce money mistakes … and how to prevent them,” Suzanna de Baca, July 13, 2012