The Biggest Mistake Women Make In Divorce — And How To Avoid It
The biggest mistake women make during divorce? For many, it’s not taking control of their finances.
If your spouse always took charge of money matters in your marriage, divorce may leave you feeling left in the financial dark. However, there’s an even more common reason why so many women end up with out of control finances in divorce: fear. According to an Ellevest women’s financial health survey, 61% of women reported feeling so anxious about their personal finances that just thinking about issues like saving, spending and budgeting made them physically sick!
It’s this type of fear-based reaction that can drive avoidance and poor decision making around financial issues in divorce. After all, who wants to think about something that makes them feel unwell? In divorce, however, not taking control of your finances is a surefire recipe for disaster, putting you at risk for everything from receiving too little alimony to accepting an unfair share of your marital assets to not being able to properly budget for post-divorce expenses.
So what all this means, ladies, is that it’s time to face your fears and increase your financial smarts. Your divorce settlement depends on it! Here are some tips to avoid this #1 divorce mistake by giving your financial savvy a boost.
3 Ways Financial Fear Shows Up During Divorce
The first step towards taking control is to get a handle on how your emotions are interfering with your ability to manage your finances right now. Do you see yourself in any of the scenarios below?
Avoidance. If you’re afraid that you’re not a “numbers person,” you may be tempted to distract yourself from your financial concerns by concentrating on what your spouse is doing wrong. For example, it may feel easer in the moment to post a Facebook gripe about your ex than it is to sit down and create a monthly budget or work through your ex’s alimony proposal. Over time avoidance becomes a very bad habit that’s hard to break, even as your finances spin further and further out of control.
Anxiety. Many women worry about not having enough savings/income/spending money after divorce. Rather than take practical steps to address these concerns, some may choose to “numb out” their anxiety through drinking, Netfix-and-chilling, or plain old denial. In the short term, you may find temporary stress relief, but the longer you put off addressing your concerns, the more your anxiety will snowball. This can be especially true if you’re a woman whose spouse handled money matters during your marriage. Anxiety around money may be keeping you stuck from learning how to take charge of financial basics, putting you at a distinct disadvantage in your divorce. If even a small-but-critical task like checking your bank balance feels too anxiety-inducing, it’s a good indicator that you have financial anxiety.
Unrealistic expectations. As mothers, women often prioritize hanging onto the family home so their kids don’t need to move. However, insisting on staying in the family home can lead to financial problems and instability if you can’t afford maintenance, fall behind on the mortgage, or have to sell in a down market. Don’t let emotion cloud sound financial judgment; you can make a perfectly nice nest for your kids in a new smaller home or rented apartment.
7 Steps for Taking Control of Your Divorce Finances
Your financial settlement in your divorce will impact you and your children forever. There is simply no room for avoidance, anxiety and the unrealistic expectation these feelings can drive. If you feel stuck or overwhelmed with all the financial know-how you need to catch up on, you can start by taking these baby steps:
1. Start a new bank account in your name only. Start depositing all sources of income and support (temporary alimony, child support) in this account. Set up online banking for ease and instant access to your financial information.
2. Run your credit report. Look for all open accounts, including joint credit cards with your spouse. Note balances and whether debts have been paid on time. Is there suspicious activity on your credit report, such as maxed out credit cards with poor repayment history that your spouse never told you about? Share this information with your attorney so that correct responsibility for marital debts can be settled in your divorce.
3. Take a divorce course. Educating yourself about the divorce process will help you better anticipate all the financial decisions to come about asset division, alimony, child support and more. You can get a sense of the pros and cons of money-related issues and how to make the best financial decisions for yourself. Start learning more by checking out divorce courses available from Divorce Coffee House.
4. Read a beginner-friendly book on financial literacy. Start with a classic like Women & Money: Owning the Power to Control Your Destiny by Suze Orman.
5. Consult with an accountant. If your marital finances are complex, or you suspect your spouse is hiding assets, a forensic accountant will gather evidence of financial findings that can help you get a better settlement. If your spouse has hired an aggressive attorney, consider hiring a lawyer who specializes in the financial side of divorce.
6. Identify a financial planner for post-divorce money success. If money matters scare you or budgeting feels overwhelming, consult with a financial planner. This person will help you successfully navigate your financial journey from married to single.
7. Go to therapy. Do you tell yourself you’re not smart enough to understand money? Are you terrified you can’t take care of yourself? These self-defeating, faulty beliefs will keep you stuck. See a therapist that can help you reverse these negative thought patterns and develop coping skills to master your situation.
Taking charge of finances in your divorce will give you peace of mind and a sense of accomplishment for doing hard things you didn’t think you could. This is key to successfully managing your finances post-divorce too. So take a deep breath and start looking at the numbers — you got this!
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