No matter what your current financial status, you can expect a divorce to have a noticeable impact on your finances. It's to be expected when you're dividing one household into two. However, you can lessen the impact during and after the divorce by making smart financial decisions during the divorce process. It can be tough to know what the right moves are in an unfamiliar situation like a divorce. Here are a few tips that can help you save money on the divorce process and maintain a better financial position once the divorce is final.
Hire a Financial Planner
Sometimes it's not enough just to have good legal advice – you also need good financial advice. One of the most time consuming aspects of a divorce is negotiating the division of assets. This can get especially complex if one or both of you are business owners, or if you have money tied up in stocks or other investments. Determining financial obligations like spousal support can further complicate the picture.
Some couples have found that talking to a financial planner is the key to settling stalled or contentious negotiations that are costing you hundreds of dollars in legal fees. An expert may be able to spot ways to equitably divide assets that neither you nor your spouse would have thought of. Furthermore, a financial planner's advice can be useful for forecasting what your financial future will be with a particular settlement, which can help both parties feel more comfortable with a proposed agreement.
Consider Not Fighting For The House
Keeping the house has been considered the smartest financial move since the time that divorce started to become common, because of the relative value of real estate. Consequently, the house is a common bone of contention between divorcing couples. But the real estate market is currently not as stable as it once was, and it's worth taking the time to consider whether this is really an asset worth fighting over.
Can you afford to keep up the house without your spouse's income? Don't forget to take into account expenses like home insurance and property taxes. If you don't keep the house, can your spouse afford to maintain it alone? It may be better for both of you to simply agree to sell the house and split the proceeds. Of course, you'll have to take non-financial considerations, like stability for any children, into account as well. There are definitely times when it is appropriate to keep the house, but that shouldn't be a knee-jerk decision. Really consider all the benefits and drawbacks before deciding.
Consider Mediation Instead of Divorce Court
Court appearances are one of the things that can make a divorce more expensive than it really needs to be. You'll need time with your lawyer beforehand to prepare for each appearance, which you'll pay for, and then you'll also pay for each appearance. A divorce can drag on for months or even years, and during that time you'll continue paying legal fees.
Mediation can help you and your spouse come to a settlement much more quickly. You should still have legal representation in the form of a divorce lawyer, of course, but you shouldn't have to spend nearly as much time or money on it, which is key during a time when your finances are changing rapidly. If you and your spouse are motivated to settle, you may be able to come to an agreement as in as little time as one day of mediation. It's rare for a divorce mediation to last more than a few days. Then it's over with, and so are your legal bills.
If you're concerned with keeping costs down during and after your divorce (and who isn't?) ask your divorce lawyer for advice on keeping the expenditures down and ensuring a comfortable financial future.