HOW DO I PROTECT MY FINANCES DURING DIVORCE?
1. Take a hard look at your expenses.
Remember that there will only be so much income to meet these increased expenses. And both parties in a divorce will require income to live their lives. Don’t let sense of entitlement, or emotion cause you to lose sight of the fact that there will be a finite amount of resources to draw from.
2. Keep debt under control.
Often people will count on a settlement that may or may not manifest. The divorce process is notoriously fickle, and putting yourself in a position that could hurt your long-term financial well-being should be avoided.
3. Don’t sell your future self short.
We are connected with our future selves financially. It is why we save for retirement, for a house, for a car, for a vacation and plan our bequests. You may make decisions that sabotage your future in order to benefit your current needs when you are going through a divorce. This could be the result of fear, but it can lead to disconnection.
This could be in the form of not advancing your career prospects because you do not want to show higher income. Deferring training so you can negotiate (or have a judge order) what might be a better short-term outcome. Staying out of the workforce harms your chances of future income and can hurt you more economically than if you receive or pay less support.
4. Engage in financial planning.
“Plans are nothing. Planning is everything.” – Dwight D. Eisenhower.
General Eisenhower knew that fighting wars has uncertain outcomes.
Your life is changing, but going through the financial planning process can help you with the negotiating process. that can work for you is a must when you are negotiating your divorce. Many people want to “wait” until they have a “deal” or an order from a judge. But how will you know what to ask for if you have not gone through a planning process?
You want whatever you end up with to be durable and be useful to your new life. Make sure that you go through a series of scenarios, so that you can provide your attorney with the information they need to help you. This can mean doing this yourself, or seeing a financial planner.
5. Hire an attorney.
There are many unknowns when going through a divorce. Trying to do things yourself, no matter how competent you may be can be a huge financial mistake. From errors in filing, to agreeing to things that you are not actually allowed to agree to.
Positive people typically do not like to hire attorneys, as they think of the best outcomes. Attorneys are there to protect you from adverse events. Having an attorney who is acting in your best interest can help you avoid pitfalls that could cost you significant money.
Seriously – hire an attorney.
Michael is the CEO of WolfBridge Financial, and has worked the financial planning industry for over 10 years. Prior to becoming a Certified Financial Planner he was deployed with the 1st Infantry Division to the Middle East. He was awarded three Army Commendation medals and the Combat Infantryman Badge.
Mike has experience working with attorneys, and specializes in Divorce Financial Planning, has experience with Special Needs Planning, and cases that involve Small Businesses. In addition to a Certified Financial Planner™, he is an Accredited Financial Counselor™, and a Certified Divorce Financial Analyst. Mike has a B.S. in Business Management and an MBA.
Where do I go from here?
Do you have more questions? Read more about many Divorce topics.