Family law practitioners who assist persons in a divorce often observe certain common financial pitfalls that people may fall into. For example, one may want to maintain a Scrooge-like exterior when looking at new spending, especially for splurging and luxuries that can no longer be afforded. It is a common fact in Missouri and elsewhere that after divorce one does not have the buying power of two full incomes. The sacrifice both during and after the divorce may be a great relief in the future when an extra financial push is needed.
One should not rush to cash in investments to pay bills. It is best to conserve early on, realizing that things will get better but it may take some time. Another thing to be careful about is the filing of tax returns and the claiming of exemptions. New laws have changed the way the IRS treats alimony, support and other financial issues.
It may also be folly to fight for the house over all other considerations. Keep focusing on having a financial plan to carry into future years. In addition, make a budget and see whether one can truly afford to pay for real estate taxes, repairs, maintenance, loan payments and everything else necessary to keep the house afloat. The drain of the home can be a financial disaster in some instances.
There may be an emotional element to keeping the home, but it is best not to decide under an emotional trigger. It’s best to wait until a full comparative evaluation of the house and other assets is made with one’s divorce attorney and a qualified financial expert. Remember that complex financial issues are involved, which may include finding the proper mix of retirement plans, IRAs, investments and life insurance.
Keep updated and maintain an organized plan under the guidance of a qualified financial planner. It may be tempting to splurge and have a monumental party that spans the globe but the day will come when sound planning will be appreciated as a much greater value. During and after the process, a person’s Missouri divorce attorney can also be a valuable resource in providing information and guidance in avoiding common financial pitfalls.
