Most divorcing people are prepared for the break-up to have a negative effect on them financially, at least in the short term. After all, it’s less expensive to live with someone and share expenses like the mortgage than to live separately. However, there are some financial silver linings to be found in divorce — particularly if you make wise decisions.
For example, if you and your spouse get a qualified domestic relations order (QDRO) to divide your retirement plans, you’re able to take funds from your retirement account without a withdrawal penalty. If you are able to reinvest this money in a more lucrative investment choice or use it to pay for a necessity like a new car that you’d otherwise have to get a loan for, you may come out ahead.
Speaking of investments, if your spouse has been the one making the investment decisions, now’s your chance to develop your own strategy. Women, in particular, tend to do better with their investments after divorce. That’s because men usually have a more aggressive investment strategy. Greater risks can mean greater rewards, but also greater losses.
Many marriages suffer because couples have differing attitudes toward spending versus savings. If your spouse liked to spend money (and rack up credit) that left you with large debts and little savings, you’re now free to create a budget that fits your income. If the two of you have accumulated joint debt, you have to be careful how that is split up and make sure that your spouse pays off any debt he or she has agreed to pay if your name is attached to it.
There are a number of other financial advantages to divorce, depending on your individual situation. For example, if you have kids, when it’s time to send them off to college, they may be able to qualify for more financial aid than if you and your spouse were still married.
It’s wise to have a good financial and tax advisors both during and after the divorce. You should get your own professionals rather than those you and your spouse had during the marriage. You want people who will look after your interests. Your Florida family law attorney can likely refer you to good people in your area.
Source: U.S. News and World Report, “7 Little-Known Financial Benefits of Divorce,” Maryalene LaPonsie, accessed June 01, 2018