Even well into the 21st century, divorce is financially harder on women than on men overall. According to one report, on average, divorced women have nearly a 30% decline in their standard of living, while men have a 10% increase.
Even though women are nearly 1.5 times more likely to initiate divorce proceedings than men, they’re still more likely to be unprepared for the financial elements of it. Certainly, that’s not true of all women — and it is true of plenty of men. Therefore, let’s look at these common mistakes apart from gender and focus on preventing them as you end your own marriage.
Not consulting a financial professional at the outset
While your family law attorney can help you make smart legal decisions, it’s wise to have a financial and perhaps a tax professional who can advise you on the effect that these decisions will have on your financial well-being. There are even Certified Financial Divorce Analysts (CDFAs) who specialize in advising people as they divorce.
Not getting enough in liquid and appreciating assets
You might walk away with the house, the boat, the cars and the art collection. However, if you don’t have enough in cash or assets you can easily convert to cash, you’re going to have difficulty handling the expenses that post-divorce life will require. That means bank accounts, investments and other assets where you won’t be penalized for withdrawals (like retirement accounts).
Remember, too, that many assets (like vehicles) depreciate quickly and significantly. Others, like real estate, are likely to increase in value over time.
Not getting the support you need
Many divorcing spouses don’t want to rely on their ex for financial help, particularly when it comes to spousal support. However, if your spouse has more individual wealth and/or income than you have, it’s crucial to negotiate a support agreement that will help you land on your feet. If you have children together, your spouse is obligated to provide the support they can afford. It’s always easier to negotiate fair support agreements during the divorce than to go back later and try to get more when you find out it’s not enough.
Divorce requires a lot of important financial decisions at a time when many people are operating out of pure emotion. That’s why it’s important to have experienced legal and financial professionals on your team.