Divorce in America today is already fairly expensive once everything’s been wrapped up. In the United States, the cost of a divorce varies from $15,000 to about $42,500, but no matter what end of the scale you end up on, that’s thousands of dollars you’ll be spending. If you can avoid these mistakes while working through your divorce, you might be able to tip the scales in your favor and save a bit on the expenses of an already difficult experience.
- Assuming that legal proceedings are necessary: Even if you and your spouse end up splitting, there are ways of managing the separation outside of a messy courtroom situation. Divorce mediation can help you and your spouse separate more amicably and work together to reach agreements, rather than having to battle it out in court. If you think it’s at all possible that you and your spouse may be able to cooperate for the sake of saving on divorce costs, look for a mediator first before resorting to an attorney directly.
- Not getting all the paperwork you need: It will likely seem like a lot and may be overwhelming, but being thorough and taking care of all of your paperwork can help you avoid expensive traps. Gather any paperwork that shows account numbers and balances, statements proving income for both you and your spouse, and paperwork that shows the values of any joint assets, like houses or other major purchases.
- Leaving joint credit accounts open: If you have joint finances, you’ll want to close those as soon as you recognize the divorce is going to be going ahead. In general, be careful with your credit utilization during your divorce. FICO recommends that your credit utilization ratio should not be higher than 30% of your original credit limit.
- Forgetting about taxes: Changing your marital status can have a surprisingly huge consequence on your taxes. This is especially true if who owns certain assets will be changing. If your name will no longer be on the deed to the house, or is the only name on the deed, this will have a significant impact on what your tax situation ends up being. Make sure to talk this aspect over during the divorce, as well as spousal support and potentially child support.
Divorce is already messy and can be incredibly expensive, but by avoiding these common financial mistakes, you may be able to save a bit of extra money during this difficult time. If you’re going through a divorce, make the most of these tips, and you may be able to protect yourself from more serious financial consequences.