If you and your spouse have decided to go your separate ways, you are likely facing a large number of decisions. Many of these decisions carry heavy consequences, so it’s essential that you take some time to carefully consider their implications, do your research, ask questions, and then make more informed choices. When it comes to financial matters, there are some decisions that may seem like solid choices in the moment, but these may lead to large headaches and complications in the future. Let’s take a closer look at a few financial traps that you may be tempted to fall into and why you should think carefully before you rush through these big decisions.
Trap #1: You Don’t Create a Financial Plan
It may seem easier to speed through your divorce so that it is over faster. However, by rushing through the process, you risk making yourself vulnerable to future hardship. For instance, if you don’t take the time to create a budget for your new life—including living expenses, health care costs, grocery budget, transportation costs, and more—you won’t be able to set yourself up for financial success once you are on your own. Also, now that you are no longer married, you may no longer have access to your ex’s spousal security benefits down the line. So, take the time to plan out your financial future—you will thank yourself later.
Trap #2: Arguing Over Who Keeps the House
Many times, divorcing couples immediately begin fighting over which person gets to keep the house. This fight usually springs from sentimental feelings about the home, so try to avoid letting your nostalgia and anxieties cloud your sense of reason. Instead, think about what “keeping” the house truly means. Think of all the costs associated with maintaining the house itself—can you afford to pay all of these expenses on your own? If the answer is no, it’s time to consider putting the house on the market, receiving some extra financial support, and moving into a place that better matches your new financial reality.
Trap #3: Forgetting About Debt
It would be nice if we could ignore debt forever, but it doesn’t simply disappear when your marriage ends. Any debt that you and your spouse accrued over the course of your marriage, especially debt that is in both of your names, must be handled. Take some time to negotiate and decide how these debts, such as car loans, credit cards, or personal loans, will be covered. Additionally, make sure that any debt that still carries your name attached to it has been paid down, or ensure that your name is removed from the account if your ex has agreed to assume the payment of that particular debt. Even if you trust your ex, you don’t want to be surprised years later by a damaged credit score because you never removed your name from a debt that your ex neglected to pay off.
Stanley A. Kempner Jr. Attorney at Law is here to help Spokane residents successfully navigate their divorces and build brighter futures. Receive the trusted legal assistance that you need today by calling (509) 309-8126.