Leaving your spouse may be emotionally devastating, but it may also be harmful to your financial wellbeing. Breaking up is costly, and you will probably see an increase in your cost of living. If you are getting a divorce, it is important to consider the monetary risks you may face.
Whether you are the breadwinner or stay at home to raise your family, divorce will impact your financial health. However, you can make your divorce more affordable by avoiding some common mistakes. Here are expensive errors you should avoid making while you end your marriage:
1. Forgetting about tax implications
When you are dividing your marital assets, you should have the tax implications in mind. What may look like a fair split may be unequal when it comes to taxes. Do not agree to any settlement without thoroughly analyzing how it will impact your tax bill. Whether you are dividing real estate, stock shares or retirement accounts, keep your future tax liability in mind.
2. Failing to budget
When you leave your spouse, your expenses will likely significantly increase. Not only will you need to worry about dividing your wealth and paying court fees, but your cost of living will go up. You need a new budget that will reflect your post-divorce lifestyle. If you do not start budgeting early, you may find yourself in a financial hole soon.
3. Seeking revenge
The goal of your divorce is not to seek vengeance against your spouse. If you are only out to pull your spouse into a vicious battle, you will only end up draining your wallet. Think twice before you give in to your aggression and anger. Endless bickering will only hurt you in the end. Remember, if you spend less, you get to keep more.
It is inevitable to experience some financial lows throughout your divorce. However, you can stop financial devastation from occurring by following these guidelines.