Divorce is one of the things you should approach with care because it can totally ruin your finances. Most people know enough to prevent major mistakes, for example, by choosing mediation and hiring an attorney early enough. Still, there are some critical mistakes that you can make if you are not careful, such as:
Ignoring Inflation
When making financial decisions that involve the future, you should never disregard the issue of inflation. Whether you are discussing alimony, child support or even college tuition costs, you must know that things will cost more in the future than they cost now.
Therefore, it would be foolhardy to accept a check for future expenses based on today's cost estimates. For example, while it may cost about $19,000 to send a child to a state public college in 2014, the figure is likely to increase ten years from now. Involve a financial expert in all your financial calculations to minimize the effect of inflation.
Punishing Your Spouse
If you are already divorcing, then what do you expect to gain by punishing your spouse? Being obstinate during negotiations and disputing everything won't get you anywhere. It will just cost you money in terms of increased attorney fees. Save money by approaching your divorce negotiations with a businesslike attitude where your main interest is to get the best out of the deal and not to punish anybody.
Being Emotionally Attached to Assets
Sure, you love your white picket fence, but does it mean it should make you choose your marital home over other assets? Will the picket fence help you to pay the mortgage and take care of property taxes? Pick the assets you wish to keep carefully so that your emotions do not overrule your better judgment.
Ignoring Your Spouse's Social Security Benefits
If you divorce, you are entitled to your spouse's social security benefits, but only if you have been married for at least ten years. This is something you should not ignore because it doesn't cost you money, and it will not reduce your partner's benefits too. Therefore, if you have been married for nearly ten years, then it might be prudent to try legal separation for a few more years before divorcing. That will make you eligible for your former partner's social security benefits.
The more you collaborate with your partner, the more you can preserve your finances. However, you can still take some precautions even if your partner is uncooperative. The idea is to involve the right people, such as divorce and tax attorneys, so that the divorce does not ruin your finances. For more information, contact a firm such as Butts, Schneider & Butts LLP.
