There are numerous financial components of a divorce, from having to sell a house to paying child support. These can be unavoidable.
However, there are some choices people make that result in unnecessary spending and financial loss. Minimizing these missteps can help parties save money during their divorce.
Preventable financial mistakes
During a divorce, the following choices could have costly consequences:
- Going to court because you will not participate in out-of-court dispute resolution methods
- Failing to understand your options regarding spousal support
- Abusing or harassing your ex, which could lead to criminal charges as well as fines and other financial penalties
- Agreeing to a valuation from your ex without conducting your own assessment
- Overspending from marital accounts
- Failing to respond to requests from the court or the other party, which can result in delays and additional legal motions
- Lying about your assets or liabilities
- Attempting to resolve your family legal issue without a lawyer to help you navigate the system and secure fair settlements
Following your divorce, you could still create financial challenges for yourself by making mistakes such as:
- Failing to pay child or spousal support on time
- Violating your child custody order
- Preparing your taxes improperly
- Leaving a job to avoid paying support
- Maintaining the same spending practices despite having fewer financial resources
These are all missteps that can have a monetary impact, and for the most part, they are all avoidable.
Ways to protect your financial future
There will be financial implications and requirements when parties divorce in Canada. Choosing not to make the decisions mentioned above can help minimize these costs, but there are other ways you can protect yourself financially.
Solutions could include:
- Working with an accountant to help you adjust your spending and rework your retirement plans
- Creating a new budget
- Pursuing new job opportunities
- Focusing on building or rebuilding your credit
- Setting new financial goals for yourself
- Considering changes like leasing instead of buying a home
By not making expensive missteps during the divorce process and taking these steps to get back on your feet afterward, you can be well-positioned to make a solid financial recovery.