Divorce is bound to be trying on both your emotional health and your financial well-being. However, while there is little you can do to prepare for the emotions that are sure to arise between filing your divorce and its finalization, you can educate yourself on the common money surprises that shroud most dissolutions.
According to Considerable., there are certain financial surprises that catch divorcing individuals off guard time and again. From unexpected taxes to financial secrets, these four issues, when left unconsidered, result in a significant headache for divorcing parties.
The true cost of housing
If you are like most soon-to-be-divorcees, you expect to move into a place of your own once your divorce is final. You may have even already allocated a portion of your budget toward future rent or mortgage costs. However, have you considered the cost of property taxes, utilities or home repairs? Most aspiring divorcees do not and so often find themselves saddled with unexpected costs they cannot afford to cover soon after embarking on their solo journeys. Other costs you should consider include security deposits, broker’s fees and furnishings for your new place.
Taxes are another cost that takes divorcees by surprise. When the judge divides your and your spouse’s shared assets and funds, you may expect to receive the full value for your share. Unfortunately, thanks to the IRS, it is unlikely that you will. Once you sell assets for cash — or if you and your spouse divvy up your retirement accounts — the IRS will expect its share of the profits.
Though the Texas courts use a strict formula to calculate child support costs, the monthly amount rarely accounts for all the extras that come with child-rearing. From the true cost of clothing to extracurricular fees to entertainment costs, there are several expenses associated with raising children that support does not cover. When your child is with you, you alone are responsible for covering these costs, and even though they may arise infrequently, they can quickly add up for a one-income household.
Debt and other money secrets
Finally, divorce uncovers a lot about people that even long-time spouses were unaware of. Many of the secrets that crop up pertain to finances. From hidden debt to unpaid bills to gambling problems, you may uncover financial surprises that could drastically affect your settlement in a divorce. It is important that you prepare for such prices by establishing some semblance of financial independence long before it is time for you to branch out on your own.
In divorce, knowledge is power. This is especially true when it comes to your finances. For advice on what to expect from the process, consult with an experienced divorce lawyer.