When you look past the heartache and upheaval of divorce, you may see a silver lining. Chances are that you and your spouse have avoided facing the struggles that finally culminated in the plan to end the marriage. Now you have the opportunity to start fresh without the weight of those issues clouding your every move.
Unfortunately, many Florida spouses in the process of divorcing fail to realize that their financial future may depend a great deal on their fiscal behavior in the months leading to day the judge finalizes their split. While you may feel a certain amount of freedom in those months, your financial restraint can keep you on track so you are not struggling on your own after the divorce.
Avoiding money mistakes
When it comes to earning, saving and spending your money, prudence is always wise. However, a divorce involves factors that are not part of your normal budget. For example, you may have court costs, attorney fees, the cost of finding your own housing and the expense of managing without your spouse’s income. It is never wise to make big financial decisions, such as quitting your job or buying a house, during such an emotional time. However, there are other poor decisions with the potential for devastating consequences, such as:
- Ignoring the new tax laws regarding alimony that eliminate the tax break for the payer
- Withdrawing money from your 401(k) or accepting a portion of your spouse’s retirement account without considering the tax ramifications
- Taking drastic steps like quitting your job so you will not have to pay spousal support
- Insisting on getting the house in the settlement, with all its expenses, taxes and responsibilities you may not be able to afford
- Selling your investments to pay your bills, which will likely come with hefty tax consequences and leave you with no safety net for the future
You may also feel like many divorcing spouses who decide to treat themselves to something special, such as a new car or a luxurious vacation. The time for that will come, but for the immediate future, you may have to focus on getting yourself into a financial routine and seeing how well you can maintain a quality standard of living on your single income.
Perhaps you are already living on your own and managing your finances yourself. You may benefit from seeking advice about how to ensure you can keep your situation in the black and moving toward a positive life. Additionally, having legal advice may improve the chances of getting a fair and equitable share of marital assets during property division.