Facing a divorce can be one of the most stressful times in your life. However, don’t let all that emotion get in the way of making wise money decisions about your future. Splitting with your spouse is never easy, but don’t fall victim to these common financial mistakes that are easy to make when going through this turbulent time.
Failure to Adjust
If you’ve become accustomed to the income generated by your spouse over the years, it’s understandable that it will hit you hard in the pocketbook to realize you can’t spend as you did before. Many times, overspending doesn’t stem from a feeling of selfishness but develops as a way to protect and preserve your children’s standard of living. Try to resist this tendency and reign in your spending to comply with your current financial situation.
Being Wary of Lenders
Just because a judge decreed your spouse is responsible for paying off certain accounts, don’t assume that lenders will care one way or the other. They want their money and may still go after you to get it, even if you’re not legally bound to pay that debt. Your best bet is to delete any jointly-held accounts before packing up and close any accounts on which you are a co-signer.
Don’t make the mistake of getting involved romantically with anyone for a while. Although it can be a shot in the arm to see that someone else finds you attractive after years in an unhappy marriage, this can be a money sucker. Why? One of the biggest credit issues after a divorce, particularly for females, is when they give loans to their new boyfriends to finance business ventures, fix a car or pay some bills. Good rule of thumb: do not lend money within the first year—at least—of your divorce. There’s another side to this as well: the need to be alone for awhile and find out who you really are without being the other half in a relationship.
Getting Back at Your Ex
If betrayal is the reason for your divorce, your first instinct may be to get revenge in the form of running up big credit charges in the hopes of burning your ex. While the rage may be understandable, the financial consequences of this are far-reaching and long-term. You could actually be held responsible for those balances in the end, so think twice before you buy a new bed courtesy of your ex.
Post-divorce purchases—especially when it comes to beautification procedures to make yourself look and feel attractive again—can have very negative effects later. While you may need the boost to your self-esteem, hold off on any big procedures, which can cost thousands of dollars you don’t have, in the first year post-divorce. Instead of racking up new bills, concentrate on paying down the ones you have already. There are better and far less expensive ways to boost your self esteem.
Competing for the Kids
A rising sense of competition can get the best of you during and after a divorce. That need to reassure the kids that everything’s going to be all right often translates to one or both parents splurging and spending more than they can afford to on their kids. Born of a desire to show their kids how much they love them, and perhaps to outbid the other parent, can have devastating and long-term financial effects. Show your love in less material ways that are more meaningful.
This article was written by Richard Craft, an MBA student who hopes to help you with your finances. He writes this on behalf of Chernoff Law, your number one choice when looking for Houston-based divorce attorneys. Check out their website today and see how they can help you.