Going through a divorce can be a brutal experience – There’s an emotional toll, and the process can be lengthy, complicated and expensive. But when the dust settles, you’ve got a brand new life to plan for. Recently divorced Texans tend to make a few common financial mistakes in the post-divorce period, but you can avoid them with a little awareness and planning.
Typical post-divorce money mistakes
One of the classic errors recent divorcees tend to make is not taking the time to re-assess their finances after the divorce. Married households often settle into a routine when it comes to financial matters, but everything changes after a divorce.
Taxes in particular can be a tricky situation. Not only is your filing status changing, but it’s quite possible that you’ve sold or disposed of certain major assets during the divorce. These often carry special tax obligations that you might not be aware of at first glance.
Continuing your financial relationship
Another common issue is not severing your financial connection with your ex post-divorce. Some former couples haven’t closed joint accounts or other satisfied other financial obligations that you had together like loans or credit cards.
Your ex might try to ask for financial support or accommodation outside the bounds of the divorce agreement. Try at all costs to stay away from this kind of continued co-dependence no matter how you feel about them. The terms of the divorce agreement should be the extent of your financial future together.
Finally, many recently divorced people fall into the trap of spending recklessly in the aftermath of the divorce. There’s a natural urge to want to change your life and treat yourself to something nice after going through the trauma of the divorce. And spending sensibly is perfectly fine. But don’t stretch beyond your means or go into debt in the immediate time after divorce.
The unifying theme in avoiding money mistakes after divorce is keeping your wits about you and putting in a little extra effort to understand your new position. If you do that, you’ll be on the track to financial health in post-divorce life.