Last time we began a discussion about seven money mistakes to avoid during property division and after divorce. Going through a divorce can be an emotional time, but individuals going through divorce should not let their emotions get in the way of making solid financial decisions. During this post we will talk about the remaining four points.
The fourth mistake to avoid is committing financial sabotage against your former spouse. A fairly common response to an ex-spouse’s act of betrayal is to act out against the person financially. Though running up a large balance on may feel good over the short-run, it will likely not be beneficially in the long-run because the person that made the purchases may be responsible for the balance. A former spouse who fears revenge debt should not hurry out and close all of his or her accounts and open new accounts because the action will have a detrimental impact on their credit score.
Sometimes going through a divorce can make an individual feel down about their looks. Some folks decide the best way to remedy the issue is by having a beauty procedure completed. Plastic surgery; however, may only add more financial burden than positive gain especially when the costs of the procedure do not match an individual’s budget. Any major financial decision should be delayed at least six months after a divorce is finalized.
The sixth money mistake to avoid relates to competing with a former spouse. When parents go through a divorce, they often want to maintain their children’s former standard of living. Sometimes, that is a hard goal to achieve when budgets change. Parents can get into financial trouble when they try to keep-up or outdo the other parent. Parents should avoid potential credit card issues by asking themselves whether they are using their credit card to prove their love.
Finally, after a divorce is finalized some people jump into a new relationship. Be aware, one of the most common post-divorce mistakes is to provide a personal loan to a new girlfriend or boyfriend. Just like mistake number five, avoid giving or lending money for at least one year after divorce.
Source: FoxBusiness.com, “Seven big post-divorce money mistakes,” Erica Sandberg, 6/9/11