Don’t Make These Money Mistakes During And After Divorce
The costs associated with divorce can be overwhelming. While the median cost 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 palatable. Sometimes people make additional rash mistakes during and after divorce that compound the financial stress of the moment. Here are some issues you would do well to avoid.
Moving on With No Financial Plan
Maybe it’s a big relief to have that whole ugly marriage behind you. Nonetheless, this is no time to liberate yourself from all financial sensibilities. While the joint goals you shared with your ex may be toast, your future doesn’t have to be. The best idea is to set some short- and long-term financial goals right away, and begin working toward them before you burn through what’s left of your money.
Feeling like you’ve just been run over by a truck emotionally? While it may feel good in the moment to blow a few hundred bucks on new clothes—or many thousands of dollars on a new car or boat—when the bills roll in you may find them to be nothing short of onerous. So refrain from excessive spending that will be trouble down the road.
Selling Investments to Pay Bills
The bills may be mounting during your divorce, but it’s never a good idea to cash out on investments to pay your monthly obligations. For one thing, those bills will keep rolling in after the investments are gone. For another, you may have to pay 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.
Dipping Into Your 401K
Again, you are understandably overwhelmed with your new financial circumstances. But when you withdraw these funds, you could be looking at a big fat tax burden, on top of penalties if you’re 59 ½ or younger. So try to find another way to deal with your financial situation.
Fighting 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.
Getting Around Alimony Payments by Quitting Your Job
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.
Advocating for You
The dedicated and knowledgeable Springfield family law attorneys at Courtney & Mills are committed to providing informed and solid guidance throughout your divorce. For a confidential consultation, contact our office today.