Not only does a divorce take a heavy emotional toll on those involved, but it also often has a serious financial impact. If you had a two-income household, making the adjustment to a single-income household may also be a challenge, even if you are receiving support. We have some tips on how to start this new chapter in your life on the right financial note.
Do Not Make These Financial Mistakes
Now that your financial situation has changed, it is important to create a budget that reflects these changes. Failing to do so would be a terrible mistake. With a proper budget in place, you can get a better idea of what may be working and what may need some more adjustments. You may look at your budget and decide that it is necessary to take certain steps to advance your career, such as seeking more training, working more hours, or asking for a raise.
Here are some other mistakes you should avoid making:
- Using your retirement savings: Oftentimes, when people need access to quick cash, they dive into retirement savings. However, this is a big mistake. Not only will you have to pay a 10% penalty tax for withdrawing any retirement funds, but you will also pay income taxes on the amount you take out. In the end, tapping into your savings will do more harm than good.
- Giving in to your ex: Even after a divorce is finalized, it is not uncommon for an ex to try to continue making financial demands. Keep in mind that you do not owe your former spouse anything that goes beyond what is covered in your divorce settlement.
- Not paying attention to your taxes: A divorce will also change your tax situation and, even if you were married for most of the year, you may still have to file separately. In addition to the change in your filing status, your divorce will also change your income for the year and how much you owe. Moreover, you will likely owe taxes on the assets you received as part of your divorce settlement.
- Treating yourself: Of course, you just went through something extremely difficult and probably feel like you deserve a little something special. However, you may want to avoid any major or extravagant purchases right now, at least until you are more financially settled.
Speak to an Experienced Divorce Lawyer Today!
At Ford & Friedman, our skilled divorce team is prepared to guide you through every step of your case. You can rely on us to protect your interests during this difficult time.
Call our law office today at (702) 904-9898 to schedule a consultation.