Financial Blunders to Avoid in Divorce – Part I
Most people put a lot of thought into the large financial transactions that they make in a lifetime. How to finance higher education, purchasing a home, even putting money aside for retirement. We plan these with deliberate financial research. But when we face divorce, we really get marred in emotions. And if you face divorce, it will most likely be the largest financial transaction you will ever make. Here are tips and tools to help you avoid some of the more common financial mistakes that people make.
1. Know What You Own
If you have not spent time paying bills, looking at retirement statements, or really understanding what your net worth is — now is the time. Grab a cup of coffee, turn on some soothing music and get to it. If you are unsure, write down what you think you own and bring this to a financial professional to help you walk through the process. You have to know what you own in order to split what you own. You can easily leave money on the table if you don’t know.
2. Don’t Sweat the Small Stuff
Now, don’t get me wrong. Know what you own, but, stop sweating the small stuff. Yes, you want the Crystal vase. Yes, he only wants it to spite you. Save the money you would spend fighting for the vase and go buy a bigger one when this is over. It’s NOT WORTH IT.
3. Thinking Revenge Is Sweet
It’s not. Revenge really is a bitter pill. Spending time trying to make yourself better instead of trying to cut your spouse in half during divorce is a far more productive use of your resources, both financial and emotional. Seeking revenge and venomously hating someone is like drinking poison and expecting them to die. It just kills you slowly, over time. Get professional help from a support group like Divorce Care or a therapist. It will save you time, energy and money and likely set you up for a more fulfilling and successful life after divorce.
4. Believing Your Attorney Is a Financial Expert
Attorneys are crucial to the divorce process. They provide guidance, support and knowledge about the law. And they are strong advocates for you. However, they are not usually financial professionals with strong knowledge about finance and taxation. A Certified Divorce Financial Analyst® practitioner can help you with the financial and tax ramifications of your divorce. Again, your Divorce may be the largest financial transaction you make in your lifetime. Especially when you are over 50 and looking at retirement. It’s important to have a financial professional help you through the process and let you know how different settlement options will affect you long term – before you finalize.
We’ll look at the last few easily avoidable blunders in part II of this blog next week. In the meantime, if you need some guidance, contact us for a strategy session to make sure you’ve got these first four covered.