Dissolving a marital union in Massachusetts can understandably be a harrowing experience. Divorce can certainly be emotionally distressing, but it can also have negative financial impacts. Here are a couple of common money-related mistakes that newly divorced people make and how they can take a toll on their finances.
First, individuals who have just been through divorce sometimes turn to retail therapy to cope with the adverse emotional effects of the divorce process. For instance, they might buy new items — including houses, for example — as a representation of their new freedom. The problem with this is that they may not be able to cover the costs of these items long term, especially if they are transitioning from living on two incomes before the divorce to just one income following the divorce.
In addition, some people may feel the need to cash in investments so that they can pay for certain bills after going through divorce. In doing this, they may intend to replenish these investments down the road. The challenge with this is that the investments they sell might be highly appreciated, which means they will owe a great deal in taxes. Furthermore, dipping into their investments may prevent them from attaining their monetary goals in the future.
The divorce process can be financially complex no matter how many or few assets may be involved. After all, two divorcing spouses may not be on the same page when it comes to the division of this property. Fortunately, an attorney in Massachusetts can help a divorcing spouse to make the most personally favorable financial decisions possible during his or her marital breakup.