As everyone knows, going through a divorce isn’t just emotionally draining, it can also drain your bank account if you are not careful. The good news is that many divorce-related expenses can be mitigated if you know what you are doing.
Here are a few helpful tips to follow for keeping your divorce expenses down:
Talk to your attorney about money-saving techniques. Most attorneys are more than happy to give you advice on how to save money during the divorce, even if that means it’s coming out of their pockets. This may include doing your own copying of documents or making some phone calls on your own behalf.
Don’t go overboard on spending in effort to cure emotional distress. You may be tempted to buy things for yourself of your children to ease the pain caused by divorce, but this often ends up backfiring if it leads to money problems. Additionally, many people end up having to adjust their spending budgets after a divorce, which is why it’s important to not let your spending get out of hand.
Remember to plan for taxes. Tax issues can end up greatly impacting how much an asset is worth, so make sure to figure them in, especially when valuing retirement accounts. For example, retirement assets that are taxable upon withdrawal can be worth at least 15 percent than assets that appear to have the same value.
Consider selling the marital home. Although your home probably has a lot of sentimental value, keeping it could get you into financial trouble if you cannot afford to keep up with the mortgage, utilities and maintenance. In many cases, it’s most cost-effective to sell the home.
Make sure you get a fair settlement. Sometimes people are tempted to give in for less than what they deserve in order to avoid conflict or reach an end in the divorce process, but this can prove to be an expensive mistake down the road. Your attorney can help make sure you get what you are entitled to.
Source: U.S. News, “How You’re Making Your Divorce More Expensive,” Geoff Williams, Jan. 27, 2015