What common financial mistakes should you avoid during divorce?

On Behalf of | Dec 22, 2022 | family law |

New Jersey couples going through a divorce often worry about legal costs as well as their financial health after ending their marriages. Many couples make the cost of a divorce even worse by making these common financial mistakes during the process.

Underestimating your expenses

Both before and during your divorce, you should start to come up with a plan about how to handle your finances without your partner. If you fail to adequately address your finances before the court finalizes your divorce, you may quickly find yourself unable to cover your bills.

To make sure you address all of your expenses, consider the following:

  • How much you spend every month
  • The creditors you have
  • Your housing costs
  • Car payments and other non-negotiable loans
  • Commuting costs
  • Educational costs for children
  • Utility costs

Splurging as therapy

The dissolution of your marriage may cause severe emotional distress. Many people attempt to alleviate the distress they feel by turning to retail therapy. New wardrobes, luxury vehicles or plastic surgery may make you feel amazing in the short term. But splurging to make up for your distress can cause long-term havoc for your finances.

Demanding a court trial

Many divorces need to go through a court trial. But you may wish to consider mediation or arbitration before going in front of a judge. Both methods allow a neutral third party to attempt to keep your divorce out of the courtroom.

The advantages of mediation and arbitration include:

  • The ability to keep your divorce details private
  • May save money
  • May reduce the time it takes to finalize the divorce
  • Offers greater flexibility in scheduling and settlements than a court trial

Improving your life

Obtaining a divorce offers you the chance to improve your life. You choose to let go of the parts of your life that no longer benefit you. Before, during and after your divorce, you should actively make financial decisions that also benefit you, instead of ones that cause you harm.