A divorce is a very trying time in your life. After all, your entire life is changing. After having spent years with someone, you are now once again on your own. You may have to live simpler since you are no longer a dual income household. You may have to adjust your whole routine, especially if you are sharing custody of the kids. You may be battling a myriad of emotions as well.
During this difficult time, it can be easy to make mistakes, especially financial ones. Let’s be honest, you’re just trying to adjust so money may not be a priority right now. However, there are some financial mistakes you don’t want to make after a divorce that could cost you down the road.
Petrelli Previtera is a top-notch divorce law firm in Highlands Ranch. We serve the entire Denver metro area, including Jefferson, Littleton, and Centennial Counties, with family law services. This includes divorce, mediation, child custody, and alimony. Continue reading about financial mistakes to avoid, and then give us a call for your family law needs today!
FINANCIAL MISTAKES TO AVOID AFTER A DIVORCE
Not Putting Together a Financial Plan
For years, you’ve been used to living with a combined income. Most likely, after the divorce, your income will drop considerably, especially if both parties were working. You now need a plan moving forward on how you will spend your new income. First things first: you need a budget. You need to know how much money is coming in and how and where it’s going out. Many people hate this “b” word, but budgets are good for you. Plus, you may need a budget if you are planning on going back to court for alimony.
Petrelli Previtera in Highlands Ranch notes that it’s not too difficult to put together a budget. You just have to add up all forms of income (work, alimony, child support, and any other income you get, such as from investments) and then take a look at your expenses. You’ll have fixed expenses, such as mortgage or rent, utilities, a car payment, other loan payments, gas, food, and credit card payments. And then you’ll have miscellaneous expenses that vary from month to month, that includes things like entertainment, gifts, purchases for hobbies, such as books or on motorcycles, clothing, shoes, and more. It’s often the miscellaneous expenses that can be adjusted the most in order to save money.
Once you have your budget down, you’ll need to start planning for the future. This involves retirement savings (401k, stock investments, and the like) and savings for bigger purchases, such as a new TV, car, or even a new house. Once you have the big picture of your budget and future planned out, you can begin to make adjustments. Perhaps you do need to move to a smaller place or maybe you’ll need to get a full-time job. Whatever the case may be, the sooner you have a budget, the better; otherwise, you could risk getting further into debt without even realizing it until it’s too late.
Not Having Life Insurance
You probably had life insurance before the divorce. However, after a divorce, it is even more imperative that you have life insurance, especially if you have children. If you are paying alimony or child support, you want to ensure your children will be taken care of should something happen to you. This goes for the one receiving alimony or child support as well, especially if both of your are working. Plus, even if you think you have enough, having extra money to give to your children to ensure they make it to adulthood financially sound is never a bad idea.
Petrelli Previtera notes that often obtaining life insurance is part of the court order when alimony or child support is awarded. Regardless, life insurance is affordable and will give you peace of mind. If you did have an existing life insurance policy, make sure you update the beneficiaries to list your children and not your ex-spouse. Do note that if you don’t have kids or other dependents, life insurance is not as necessary of a step.
Not Updating Your Will
Many people make a will and then forget about it for years, even decades. However, now that your circumstances have drastically changed, you need to update your will in order to ensure the right people will receive your assets if you should die. One of the worst mistakes is not updating your will and your spouse is listed as the recipient of all or most of your assets. This not only could endanger your children’s financial future (especially if your spouse has remarried), but your spouse will now receive a windfall you never intended. Imagine, too, if you are remarried; you are now leaving your new spouse nothing.
Petrelli Previtera, a top divorce law firm, recommends a consultation with our top divorce attorneys, even if you did have a different divorce attorney for your actual proceedings. We’d be more than happy to review your financials with you and make recommendations for adjusting your will.
HOW PETRELLI PREVITERA CAN HELP WITH YOUR DIVORCE
As one of the top Denver-area divorce attorneys, Petrelli Previtera makes your priorities our priorities. With more than 30 years of combined experience, the divorce law team can handle all of your divorce issues, from child custody and alimony to the actual divorce, mediation, and prenuptial agreements. We listen to our clients and their needs and work diligently to obtain a favorable outcome for your divorce. We are very cognizant of the financial toll a divorce can take; thus, we can help educate you on financial mistakes we see.
The divorce rate in the United States, while decreasing, still remains high, leaving many families reeling from the effects. Our divorce law firm cares. We offer individualized representation that is tailored to your needs. Contact Petrelli Previtera in Highlands Ranch today to schedule a consultation!