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Divorce and finances

On Behalf of | Oct 8, 2019 | Divorce

Going through a divorce in Wisconsin can be financially devastating. Between attorney fees and paying for two households, the process can be draining. Post-divorce provides its own financial headaches if one spouse owes child and/or spousal support. However, making smart decisions and planning ahead can minimize the financial impact, and there are even financial benefits after divorce.

According to Investopedia, choosing mediation over court litigation is one way couples can save money during a divorce. This is not the best choice for all situations, but it is a good option for uncomplicated circumstances and a couple who can communicate and negotiate. If the mediator charges by the hour, the more the couple can decide between themselves the less money the process will take.

To prevent any surprises after the finalization of the divorce, there should be closure of all joint accounts and credit cards. If there is joint debt, make sure to figure out who is responsible for it and update changes with the lenders/creditors.

The reality is that for most couples, money will be tighter after the divorce, but US News points out some financial benefits divorcees can take solace in. One is a sense of freedom. Instead of having one person being in control of the budget or two people fighting over spending, each partner now can decide how to budget the money they have. For savvy people, they may be able to build up money faster than when they were in the marriage because they put saving and investing as a priority.

Parents who have college-aged kids may see a benefit in terms of increased financial aid for students. Newly divorced people also have the opportunity to pull money out of retirement early without paying a penalty. This, however, can be a risky move and anyone considering it should consult with financial professionals first.