When your marriage ends, the storm of divorce costs can leave you reeling financially. It takes some guys years to get back to a place of stability after losing thousands to attorney fees, filing costs, child support, alimony, and more.
In recent months, with inflation hitting record levels and many fearing a possible recession, those expenses have been even more painful. Recently, Cordell & Cordell hosted a virtual town hall to discuss the best way to approach divorce during times of economic instability when it seems you can least afford it. Fortunately, there are some fairly straightforward tips and strategies you can utilize during your case to limit the overall cost.
That said, divorce costs are still substantial in most cases, not to mention unpredictable, so it is crucial to include planning a realistic and responsible budget on your divorce checklist, as you are preparing for divorce. Knowing how much money you have, where it is coming from, and where it is going will allow you to better prioritize where you need to spend your money and how much you need to save.
Here are a few helpful pointers as you are planning for divorce that should help you budget responsibly and avoid divorce debt.
Protect your credit
If you are not careful, you can end up with an enormous amount of divorce debt and your credit score can take a huge hit.
To protect yourself, go through your credit report and make sure you separate and freeze joint accounts. Remove your ex-wife’s name from any non-joint accounts and if you have any joint loans, you should look into refinancing.
It also is worth asking your divorce attorney if you can include provisions in your settlement that protect your future credit. For example, if your wife is awarded the marital home in the division of property, a provision could be added requiring her to refinance the house within two years or else it must be sold.
A lot of guys would not know it was even possible to add such provisions to a divorce agreement, which is why it is important to get in touch with a divorce lawyer for men, so that you have someone in your corner who is committed to making sure your rights are protected in family court.
Hire a financial advisor
In addition to a divorce attorney for men, a lot of guys retain the services of a certified financial advisor during divorce to help sort out the different financial intricacies involved in the divorce process.
“From helping to determine the value of a business to forecasting future income potential, financial experts are a crucial professional to include on your divorce team,” said Cordell & Cordell Principal Partner Joe Cordell.
Financial advisors can help you prepare for a divorce at the beginning of the process. They can assist in structuring the divorce settlement in a tax-advantaged manner and guide you through the division of retirement benefits. After divorce, they can help you come up with a comprehensive estate plan, so you are financially prepared for the future.
It obviously costs money to hire a financial advisor, but like the decision to retain a divorce attorney, it should be considered an investment that can end up saving you money in the long run.
Perhaps the most important step to budgeting responsibly and avoiding divorce debt is the most obvious one. Live within your means.
Keep track of your income and fixed expenditures so you know what you can and cannot afford. Wait before making any major purchases, such as a new house or car, until you are sure you are financially stable for the foreseeable future.
If you need help staying organized, there are plenty of free online apps that can help you plan a budget that works for you.
Divorce costs can be substantial, but careful and disciplined planning and budgeting can help you offset those expenses and ensure that you regain control of your finances once your divorce is finalized.