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The Most Common Financial Mistakes Made During Divorce

The Most Common Financial Mistakes Made During Divorce

As you go through your divorce, you will need to make key decisions that could affect your long-term financial security. Unfortunately, many people set themselves up for failure by making preventable mistakes.

Below are some of the most common financial errors Ohioans and others make during the divorce process — and how you can avoid them:

  • Not fully understanding your expenses: Most people can tell you how much they make per month, but cannot tell you exactly how much they’re spending and on what. It’s especially important as you are going through a divorce to take the time to develop a realistic budget based on all your expenses, and figure out where you can cut spending. You may need to adjust your lifestyle moving forward.
  • Believing you should keep the family home: It can be very difficult to let go of a family home, especially when it’s where you’ve raised your children. However, you need to carefully consider whether it’s in your best financial interest to hang on to your house or if you can realistically cover its costs.
  • Not understanding fair property division: Ohio courts divide assets according to the principle of equitable distribution, which means a fair division but not necessarily an equal one. The value of an asset is not only defined by its current market value. In some cases, assets that generate income or appreciate over time could be worth more than that. A good divorce lawyer will carefully analyze what your assets could be worth in five, 10 or 15 years from now to ensure the courts have accurate information to make a fair division.
  • Not taking debt liability into account: You are at least partially responsible for any debts incurred during your marriage. Thus, the responsibility for these debts will be split during the asset division process. As you prepare your budget, you must take this liability into account.
  • Attempting to decide financial issues one at a time: Although it may seem easier to decide on your various financial issues separately, it is never that simple. You must consider how each asset, income source or other financial matter intersects with all the other factors in your divorce. That’s why it’s important to be represented by an experienced divorce attorney who understands the financial impact of your decisions.

To learn how you can avoid making major financial mistakes as you dissolve your marriage, meet with a knowledgeable divorce lawyer in Dayton at Fox & Associates Co., LPA.

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