Getting Divorced? Avoid These Top Financial Mistakes
Divorce is a messy affair that leaves you with half of what you had and can lead to denial of change. You are not only getting emotional distress, but you also can get into financial crisis. Economic implications of divorce last for quite a long time before you get back on your feet. Below are the financial mistakes to avoid during the divorce process.
Underestimating Your Expenses: A lot of people do have an idea of what they earn but can hardly tell where the money goes. Take note of all your expenses and create a realistic budget. As divorce will bring about a change of lifestyle, consider the cost of your future living expenses. Consider the inflation fluctuations of the coming months and factor it into your budget.
Keeping the Family Home: It is normal that the parent who gets more custody time of the children keeps the family home. This is one of the many financial mistakes that a lot of people make. Consider if you can afford to keep the home running. A house comes with many expenses, property taxes, mortgage, home maintenance, amongst other expenses. Avoid getting into financial trouble by considering first if you can afford the house you used to pay as a couple.
Miscalculating the Value of Assets: There are always headaches when you are splitting property. When it comes to the splitting of assets, whose value is changing, you will require a professional to calculate the worth of the assets while keeping in mind the increase or decrease in value over time. This way you will not be left with the short end of the stick and in a financial mess.
Failing To Take Insurance Cover on Alimony: You can only collect child support and alimony if your spouse is in a position to pay. With the death or disability of your partner then the payments will stop. In the settlement hearings, request that your spouse gets life and disability insurance. This works to ensure the payments keep coming even after the death or disability of your spouse. Ensure that your spouse has made all the right designations by reviewing the policy before finalizing the divorce.
There are a lot of financial hurdles to overcome during divorce. Professionals will help you get through the divorce and set you up with a budget to help get your life on track. Bypass many of the financial headaches that can possibly arise after dissolution with proper planning so that you can enjoy a stress-free future.