It is understandable to focus on the emotional aspects of one’s divorce. However, you should not overlook a very important element of your breakup that could easily determine the course of your future. That is your finances.
You may find it difficult to concentrate on money at this emotional time of life. Unfortunately, if you make financial decisions in haste during your divorce, you may find yourself facing years of unnecessary struggle. There are several items that could lead to costly mistakes if you do not deal with them carefully.
Take your time
Even the most amicable divorce can be painful, and many spouses simply want to get it over with as quickly as possible. This is understandable, but you will certainly want to slow down when it comes to those decisions that could make or break your finances in your post-divorce life, for example:
- Do you have your own health insurance coverage if you will no longer be on your spouse’s policy?
- Does your settlement include health insurance for the children, or will you need to provide that?
- Do you understand the tax ramifications of any investments you will receive from asset division?
- Have you discussed which of you will pay for college for your children? Who will control any funds you have already saved for this?
- Are you eligible for any Social Security benefits through your spouse, and do you know how to claim them?
- Do you know how to obtain your fair share of any retirement accounts, pensions or 401(k)s that are considered joint assets?
You might have strong sentimental attachment to the family home or simply feel it is in the children’s best interest to remain there. However, remember that owning a home requires more money than just a mortgage payment. Before you fight for the house in your divorce agreement, be certain you can afford such expenses as property taxes, repairs and routine maintenance.
Be proactive about your future
The first few months or years after a divorce are a time of adjustment, and they can be quite difficult. The last thing you need is to add financial worries when your life is already full of challenges.
To minimize the chances of struggling financially after your divorce, you will want to make sure you receive a fair portion of marital assets and that you avoid being saddled with any unnecessary debts. You might accomplish this through skillful negotiations or strong representation in court.