There are almost one million divorces in the United States each year. If you’re about to add your divorce to the count, make sure you take steps to avoid the financial disaster many divorcées experience.
Today, most families have two working spouses. They’re used to pulling in two incomes, and won’t be able to survive after a divorce unless the assets are divided fairly. Avoiding some of the major mistakes of the divorce process can stave off financial disaster for you afterward.
One of the major things to avoid is getting stuck with illiquid assets. You might think you want the house, but think again. Unless you get the house and an investment account that can help pay the mortgage, you might not want the house after all. Getting stuck with illiquid assets can create a major cash flow problem after divorce.
Another thing to be aware of is credit scores with divorce. Many couples destroy their credit in the process of separating, leaving both on weak financial footing after the divorce. Check your credit before a divorce, and freeze everything possible. Don’t rack up any more debt. You could be held totally responsible for anything that’s in your name as well as your spouse’s, so keep that in mind during the divorce.
Finally, make sure you’re budgeting as you’re going through the separation process. Moving down to one income can be tough, especially if your spouse was the one who handled most of the bills. Account for all the major bills you have to pay, and start living on a tight budget during and after the divorce.
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