Making big decisions under stressful conditions is always a risky practice, and there are very few events more stressful than a divorce. Issues that involve custody, child support and visitation can often take precedence over financial issues, and it is understandable that emotionally-charged decisions like these get priority billing. When it comes to the following financial issues, however, it could pay long-lasting dividends to attend to them now. Read on to find out how to address these major financial moves in a better manner.
You fail to make a budget. If have not already been using a budget to deal with your family finances, doing so now is vital. Your financial situation is about to undergo a big change, and you need to stay on top of the changes. As soon as you know a separation and divorce is eminent, take some time to do a budget or to tweak your current numbers. A big part of divorce is dealing with marital debt and property, and knowing where you stand is vital if you are to make good decisions to protect your financial future. Ask yourself how much income you need and how you will continue to honor your current and future financial obligations.
You automatically ask for the family home. Home represents much more than just bricks and mortar, it's a place of respite and security for both you and your children. While making a move could potentially bring an unwelcome change, it's important to take a realistic look at what a home really is: a potential financial burden. Evaluate the expenses, such as the mortgage payments, homeowner's insurance, property taxes, repair costs, maintenance costs, utility costs and more before you decide to ask for the home. This is a difficult time to face facts, but your home may be a greater expense than you imagined. For example, a heating and air-conditioning system replacement could end up costing you from $1,900 to $5,100 in parts alone.
You overlook the true value of an asset. Another way of looking at the above mistake is failing to properly evaluate the real and potential value of an asset. Just as a home builds equity and could represent an important investment for the future, some assets are more than just the current valuation. For example, a vacation or rental property could end up producing a valuable income for years to come for whoever is awarded its possession. Before you dismiss an asset that fails to interest you personally, take a look at its value beyond what it may first appear.
For more help and advice on managing your finances during your divorce, contact a divorce attorney, like those at Eschbacher Law.