Posted on behalf of Jeffrey N. Greenblatt of Joseph, Greenwald & Laake, PA
People in Maryland may have seen a recent article about the problematic trap of spending beyond one’s means, which many people fall into during or after a divorce. While staying on a budget can be hard for some people to begin with, it can be especially hard, and especially important, for people going through a divorce and getting ready to start a new phase of their lives. Starting off this new phase can be difficult when a person has to do so while heavily in debt.
Spending money on non-essential items is a common thing people do to make themselves feel better after the deeply emotional and often painful experience of ending a marriage. At first blush, it may look like a harmless way to cope with the stress and pain of divorce. After all, many people get a nice chunk of assets from property division, and may want to indulge a little bit. However, the recent article cautions people not to fall into the trap of spending wildly during or after a divorce, because odds are those people may need that money for other things.
Property division is meant to provide each divorcing spouse with an equitable division of marital property, and may include liquid assets as well as things like real estate and other tangible property. But people who spend money that is communal property during the divorce process may ultimately be responsible for accounting for that spent money when it comes time to split things up.
People may not realize that living on one income might require some sacrifices, not more spending. It helps to create a budget to stick to during and directly after a divorce. By keeping track of the budget as well as future goals, people can start post-divorce life on the right foot and not have to worry about looking back.
Source: Huffington Post, “Did You Financially Self-Soothe After Your Divorce?,” Diane L. Danois, May 21, 2013