During your divorce, you will need to take a number of steps that could affect your financial future. It is important that you carefully weigh all of these decisions you will need to make so you do not end up accidentally compromising your long-term financial security.
With this in mind, here are some of the biggest financial mistakes you should seek to avoid during your divorce in Lubbock, TX:
- Underestimating expenses:
You probably know exactly what you earn every month, but do you know exactly how much you’re spending, and just as importantly, what you’re spending your money on? Take the time to write down every single one of your known monthly expenses, and based on that develop a realistic budget and find areas you can afford to cut back in. Consider costs of future living expenses along with this.
- Attempting to decide single financial issues at a time:
In a divorce, you really cannot look at each source of income or asset as its own entity. In doing so, you do not get the bigger picture of how investment losses, taxes, capital gains, inflation and timing issues all interact, among other financial factors that you have to take into account. You need to get a more holistic view of your finances to help you better understand how one financial decision you make could affect other decisions you have to make as well.
- Not working with a financial advisor:
Your divorce attorney will be able to help you to an extent with some of the basics of setting yourself up for life after divorce, but financial matters are really best addressed with a person who has the training and experience necessary to provide you with accurate, helpful financial advice. A divorce attorney is an outstanding resource to have guiding you through the divorce process, but they are typically not qualified to give certain types of financial advice.
- Not insuring alimony or child support payments:
If you are receiving child support or alimony payments, you should know that your ability to collect those payments is only as good as your ex’s ability to make those payments in the first place. You can request that your ex-spouse obtain life or disability insurance policies, which ensures those payments continue if your spouse passes away or becomes disabled.
- Not considering or understanding your debt liability:
Unsecured debt is an important factor you’ll have to consider in your post-divorce financial planning. Usually this means credit card debt. Remember that almost all debts incurred during the course of the marriage are a shared liability. This means you could still bear responsibility for credit card debt your spouse racked up. Even after dividing responsibility for your debts, you should still be aware that a creditor could come after you if your ex fails to make payments. If at all possible, you should aim to pay off these debts before you finalize your divorce.
For more advice about avoiding financial ruin after your divorce in Lubbock, TX, contact the Law Office of Rob Biggers today.