Women going through a divorce are under an extreme amount of pressure and stress. Emotions, which can include anger, sadness, fear and resentment can run high, and worrying about the kids can feel like a full time job! Because women are so preoccupied with all of these stressful factors, they might make money mistakes during the divorce process. And sadly, for women, the consequences of money mistakes can be even greater than they are for men.
Why? Because women see a 27% decrease in their standard of living after divorce, while men see a 10% increase in theirs. That’s a huge gap! And you can see that any money mistake by a woman in divorce can impact her more heavily.
Understanding the most common money mistakes that are made during divorce can hopefully help you avoid them.
Money Mistake #1: Not fully understanding your financial situation.
You need a clear picture of your assets, liabilities and income so that you can make informed decisions during the divorce process. Even if you haven’t been involved in the family’s finances up until now, it’s never too late to start learning about what has been going on with the money.
Mistake #2: Not hiring a financial advisor.
Many women going through divorce assume that they can handle their finances on their own and sometimes are too ashamed to ask for help. Divorce is a very complex financial process that requires specialized knowledge and expertise. A financial advisor who is well-versed in the divorce process can help you understand where you stand financially and help you plan for hte future.
Mistake #3: Letting emotions guide your decisions.
Divorce is an emotional process and it’s okay to have feelings and acknowledge them. But when it comes time to make financial decisions in the divorce, those decisions need to be based on facts and sound financial principles.
Mistake #4: Not considering the long-term consequences of your decisions.
During divorce it’s easy to focus on the short-term and forget about how this will affect you in the long-term. You might consider taking a lump sum payment in lieu of spousal support because it sounds like a good idea at the time. But it is important to analyze how you will fare 10 or 20 years from now with the financial decisions you’re making now.
Mistake #5: Not updating your financial plan after divorce.
Among the other updates you make after divorce, updating your financial plan to reflect your new reality is critical. You need to consider revising your budget, updating your estate plan, and revisiting your investment strategy. Make sure these things are aligned with your changing goals and aspirations.
Divorce is really hard when you are in the thick of it, but if you can avoid these 5 money mistakes, you will end up with a better divorce outcome and financial life after divorce. The Divorce Money Guide has the tools and guidance you need to take control of your situation and come out of your divorce on solid financial ground.
The Divorce Money Guide helps you secure your future.
Follow the easy-to-use Guide and find the money you’re entitled to. The Divorce Money Guide includes:
- 10 video tutorials
- Step-by-step worksheets
- 10-step framework to locate and organize all statements
- Template to gather account statements and previous tax returns
- Tools to uncover secret accounts legally
- Budgeting strategies to move your life forward
- Steps to take after catching a cheater
- Post-divorce checklist
- Resources to find information on people, companies, and real estate
- Lifetime access to all materials