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Writer's pictureJade Eagles

Common Financial Mistakes to Avoid in Divorce

Divorce can be one of the most emotionally and financially draining experiences a person can go through. In our latest episode of "Cover Your Assets," myself along with my co-host Josephti Cruz share personal stories and professional insights, highlighting the importance of understanding your finances and making informed decisions to ensure a stable future post-divorce.





Many individuals, eager to move on from an unpleasant experience, rush through the process without fully understanding the financial implications. We stress the importance of taking the time to understand your finances and seeking professional guidance, such as consulting a Certified Divorce Financial Analyst (CDFA), to avoid costly mistakes.

A significant issue that many women face post-divorce is unexpected financial surprises. According to a 2019 study by UBS, over 70% of women encountered negative financial surprises during divorce. This statistic underscores the importance of both spouses being actively involved in financial planning and decision-making during the divorce process.


Whether it's property, businesses, or investment accounts, accurately valuing assets is crucial to ensure a fair division. We recommend hiring neutral third-party professionals to assess the value of these assets. This approach not only provides an unbiased valuation but also helps prevent one spouse from taking advantage of the other. We share anecdotes of individuals who made the mistake of accepting a spouse's lowball valuation, only to realize later that they had been shortchanged.


It’s vital to set realistic expectations during and after a divorce. Misconceptions about lifetime support and maintaining the same lifestyle post-divorce are common. We debunk these myths and highlight the necessity of adjusting your expectations and lifestyle to match your new financial reality. It’s important to not overspend and plan for a more modest lifestyle, at least temporarily, to ensure long-term financial stability.





While the divorce process can be very emotional, it’s crucial that people separate emotions from financial decisions and approach the process as a business transaction. Whether it's rushing through the process to escape an unpleasant situation or dragging it out in hopes of reconciliation, allowing emotions to drive your decisions can lead to significant financial consequences.


One of the most important things a person can do for themselves during a divorce is to seek professional advice. We stress that while friends and family may offer well-meaning support, guidance from experienced advisors is key to making informed decisions. A second opinion is recommended if there's distrust but ultimately, people must accept the reality presented by professionals. Whether it's hiring a CDFA for an hour or consulting an attorney, investing in the right guidance can save you from costly mistakes and ensure a clearer financial future.


 

Cover Your Assets - a divorce & money podcast

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Jade Eagles on LinkedIn

Josephti Cruz on LinkedIn 


Divorce might be the end of one chapter, but it’s also a brand-new journey filled with hope and growth. Join us for practical tips for financial empowerment and insights to make this time a little less daunting.




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