It’s easy to look just at the short-term financial picture when going through a divorce, but it can be disastrous. It is critical that you think about every decision through the lens of your big-picture financial plans.
For instance, one woman did not have a job, and she was used to a fairly luxurious lifestyle. She did not want to lose her country club membership. She also decided that, as part of the property division process, she wanted to keep the house.
In the short term, keeping the same standard of living sounded enticing. However, she forgot that she would need to refinance the house and take out a mortgage on her own to keep the home after the split. Since she hadn’t been in the workforce in years, this would be nearly impossible.
Her second idea was to simply sell the house, take what she earned from the sale, and buy a different home. Again, in the short term, that was an attractive plan that wouldn’t add mortgage payments to her monthly budget.
The big picture ruined her plan a second time, however. She did not realize that the home was no longer worth as much as they still owed on their large mortgage. Instead of getting enough money to buy a house, she would need to pay money to make up the difference.
This example shows why you need to think about the big picture. Be realistic about your finances. Don’t ignore problems just because you want short-term gratification. Make sure that you fully understand your financial situation after divorce so that you can make decisions that are best for your future.
Source: Next Avenue, “The Big Money Mistakes Divorcing Couples Make,” Tracy B. Stewart, accessed April 12, 2018
