Last time we started a conversation on how to avoid seven common money mistakes often committed after going through a divorce. The period of going through a divorce is often a time fraught with emotions and sometimes emotions can get in the way of a solid financial decision. In this post we will discuss the remaining four money mistakes.
The fourth money mistake to avoid is one committed out of the feeling of revenge. Sometimes an individual may want payback if an ex-spouse was unfaithful during the marriage. Often, revenge takes the form of financial revenge by ruining a former spouse’s credit with an excess of credit card charges. Racking up a big balance may feel cathartic, but it is a bad financial decision since the individual that makes the charges could be held responsible for the balance. Former spouses who fear revenge credit balances should not rush out to close every credit card account and open new accounts. The process will lower the person’s credit score.
Sometimes people who go through the end of a relationship want to make themselves feel better by having beauty procedures completed. Beauty procedures like plastic surgery can add more unneeded expense and will likely not convince a former spouse to get back together. Major financial decisions after a divorce should be delayed by at least six months if not one year.
Competition is the sixth mistake. On occasion, parents who divorce can feel a need to earn their children’s love by purchasing gifts. Parents should not try to outdo or keep up with each other; especially when budgets change. Parents should not run up expenses by proving their love with credit cards.
Finally, after a person finalizes their divorce, the person may be eager to start a new relationship. One of the most common mistakes is to loan money to a new girlfriend or boyfriend. Recent divorcees should not provide personal loans for at least one year after divorce or you might risk a Louisiana bankruptcy.