Budget Friendly Divorce: 5 Ways to Save Money
Is it possible to have a budget-friendly divorce?
It can be if you understand that the most expensive thing in divorce is FEAR.
Fear of the process. That the agreement isn’t fair. Maybe you’re doing it all wrong. Fear that other people know better than you do. Afraid you’re missing something.
The problem is that fear and anxiety are incompatible with good decision making.
So what’s the antidote to fear? It’s KNOWLEDGE.
The best way to save money in divorce is to be knowledgeable and informed so you can make smart and confident decisions.
Utilizing the services of professionals like family law attorneys, financial planners and mediators aren’t cheap, but you absolutely can manage how much you spend by being knowledgeable and prepared.
A budget-friendly divorce is within reach.
5 Tips for a Budget-Friendly Divorce:
1. Get familiar with your own finances
Divorce is mostly about deciding who gets what (assets, debts, spousal support, child support) in legal terms. Doing the legwork to understand your own financial situation gives you the right foundation. Once you know and understand everything that is on the table, you will have a much easier time evaluating settlement offers and proposing counteroffers.
Each state has it’s own version of a financial disclosure statement that asks you to list your assets, debts and living expenses.
Having a clear picture of what it would take to maintain your current lifestyle is a great first step. Next, you can consider what changes might occur as a result of the divorce (health insurance, daycare, etc…).
Doing this work ahead of time not only helps with a budget-friendly divorce, but helps you establish a budget-friendly post-divorce lifestyle.
If the idea of busting out the calculator makes you break out in a cold sweat, then check out my Ditch Your Divorce Fears Financial Planner.
These are the tools, tips, and worksheets I use with clients every day to help them take charge of their financial lives. Whether you’re preparing for divorce, right in the thick of settlement negotiations, or just want to get a handle on your finances, this Starter Pack will put you on the path to success.
2. Learn local divorce laws
A quick Google search can provide you with information about divorce law in your state. Make sure you meet the residency, separation and other requirements. You will want to understand the difference between separate and marital property as well as whether you live in a communal property state.
Check out this resource for laws in your state.
There will be a variety of options for you to choose from that vary by state and locality, but common options are pro se (do it yourself), dissolution, mediation, collaborative law, and litigation.
You also want to be sure you are choosing an attorney that specializes in family law and is very familiar with the courts and judges in your jurisdiction. Many times, your attorney can give you a good idea of how a judge would rule or how things typically go in your area.
3. Know what you want
Divorce is a negotiation. Knowing what your priorities are will prepare you to make proposals and decisions.
Once you have a grasp on your finances, both now and post-divorce, you can take some time and determine what is most important to you. Consider making a list with 3 columns: 1) must have 2) would like and 3) can negotiate. For example, would you rather get cash in your settlement or are you more concerned about keeping your retirement account? Do you want the crystal or the china? Are there visitation schedules or details of a parenting plan that are critical for you?
As part of your budget-friendly divorce, remember to examine the short term, long term, and tax implications of all your choices.
4. Use your attorney efficiently
I recommend that all my clients retain an experienced family law attorney to protect themselves. But that lawyer is going to bill you at somewhere between $250 – $400 per hour (or more). So you want to use their services only as necessary. Paying your attorney hourly to listen to you complain about your soon-to-be-ex or help you understand the basics will burn through your retainer fee faster than you can imagine. Just 3 hours at $350 will get you a bill of more than $1,000.
Knowing your own finances, local law and what you want will all help to make meetings with your attorney go more efficiently. Each meeting (or phone call) should have a specific purpose and you should have a written list of questions to go over. Use an app like Google Keep or Notepad to write your questions down as they come up for you. That way you will have them all at hand to review before your meetings and can jot down the answers.
If possible, try negotiating with your spouse on your own or through mediation and use your attorney to make sure that your agreement is equitable, enforceable and likely to be accepted by the judge.
There’s nothing budget-friendly about working out an agreement with your spouse only to have it rejected by the courts.
5. Avoid emotional decisions
Divorce is one of the top 5 most stressful events you’ll face in life and it’s normal to feel emotional and overwhelmed. There are so many decisions to be made at a time when you are least prepared emotionally to make them.
Get the support you need from a divorce coach or therapist. Don’t let that fight, flight or freeze emotional state cause you to make decisions you’ll regret later. Acting out of anger, trying to exact revenge or throwing in the towel will all create more problems than they solve.
One of the keys to a budget-friendly divorce is keeping a cool head and thinking through the consequences of decisions. If you let emotions take over, you may not be happy with the choices later on. Read more here about what happens when the brain gets overloaded emotionally.
A couple of tools that can be useful during this time are:
1. On the Stand. Before you send that text, share details with a neighbor or post on social media, count to ten. Then pause and reflect whether you would want what you are about to say to be read aloud in court.
2. Baby Steps. If you get paralyzed, give yourself only 1-2 tasks to accomplish each day and report into your coach or a safe friend. If all you did today was make a phone call to the insurance company, give yourself credit and celebrate that.
Surround yourself with people that can guide you and hold you accountable during the divorce process. Your future self will thank you.
I help clients find the information and clarity they need to stay calm and focused throughout the divorce process. If you’d like to find out more, click here to schedule a Complimentary Consultation. Let’s chat about how to conquer those fears and save cash at the same time.
Wishing you strength and wisdom.
