Photo of Professionals at Weinberg, Kaplan & Smith, P.A.
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3 financial mistakes to avoid in your divorce

by | Oct 19, 2019 | Firm News

It is a myth that half of all marriages end in divorce. Today, married couples only have a one-in-four chance of divorce, which means your odds are far better than at other points in American history.

However, divorce in New Jersey still happens, and you need to be ready for it if your spouse files the paperwork. You do not want to end up in a bad situation, which means preparing your finances accordingly during the proceedings. You do not want to make a terrible error and end up losing too much money due to the divorce. 

Mistake #1: Failing to budget ahead of time

As soon as you file for divorce, take a look at your finances. You will likely separate your bank accounts if you shared one during the marriage. You need to consider how much money you currently bring in and what you need to spend on essentials. This helps you live comfortably during the divorce proceeding, and it also gives you a sense of how much you need to ask for in alimony.

Mistake #2: Taking any settlements immediately

Your spouse and his or her attorney may offer you a settlement right away. It may seem like a good alimony amount, but you need to take it with a grain of salt. You should have your lawyer look over any settlements to determine if you can comfortably live on the amount offered. Do not be afraid to go to court to fight for your rights. 

Mistake #3: Dipping into investments

During a divorce, you may feel tempted to dive into your investments to pay bills. However, this is dangerous. Your investments build in value over time while paying the bills or transforming an asset into cash does not help you in the long run. Additionally, if you take money out of a retirement account early, doing so comes with heavy taxes.