Divorce is one of the most emotional life transitions anyone can face. And when emotions run high, financial missteps are easy to make.
Unfortunately, those mistakes can be expensive—and long-lasting.
Whether you’re contemplating divorce or already in the process, being proactive with your financial decisions can make a substantial difference. The goal is not just to protect what you have, but to avoid regret later.
Here are five common divorce money mistakes that could cost you thousands—and how to avoid them.
Mistake 1: Not Understanding the Full Financial Picture
Many people go into divorce negotiations without a clear understanding of what they actually own—or what’s at stake. This can lead to one-sided settlements or missed assets entirely.
Hidden retirement accounts, investment portfolios, deferred compensation, and business equity are frequently overlooked. Verbal agreements made in the moment, without proper documentation, can also backfire down the line.
A full financial inventory—backed by clear records—is essential. Without it, you're negotiating in the dark.
Mistake 2: Fighting for the House Without Running the Numbers
Wanting to keep the family home is an understandable emotional response. But the practical side often tells a different story.
Mortgage payments, property taxes, maintenance, insurance, and potential capital gains can turn a seemingly smart decision into a financial burden.
Unless the home fits into a sustainable post-divorce budget, it may make more sense to sell—or negotiate for other assets that support longer-term stability.
Liquidity, cash flow, and tax exposure all matter more than sentiment.
Mistake 3: Underestimating Post-Divorce Expenses
The cost of living doesn’t get cut in half when a marriage ends—yet many people plan as if it will.
New housing, child care, transportation, insurance, legal fees, and everyday expenses can increase significantly when you shift from a shared household to managing things alone.
It’s essential to build a realistic solo budget that accounts for both your immediate needs and longer-term obligations. The better you understand what life will actually cost, the better you can advocate for fair outcomes during the divorce.
Mistake 4: Skipping Long-Term Planning
Divorce is often described as a “financial reset.” That’s true—but without a plan, it’s easy to fall behind permanently.
Neglecting your retirement timeline, investment strategy, or future income needs can delay financial recovery and limit your options later.
Even if you’re focused on short-term decisions today, don’t lose sight of what comes next. Will your settlement be enough to fund your goals? Are you protected against longevity risk or rising healthcare costs?
Long-term planning matters—especially when your financial trajectory has just changed.
Mistake 5: Going It Alone Without Financial Advice
Divorce attorneys are essential. But legal counsel isn’t the same as financial strategy.
Many people assume their lawyer will cover all the financial angles. The truth is, most legal teams don’t model future cash flow, tax implications, or investment outcomes. That’s where a divorce-savvy financial advisor or CDFA® comes in.
Having financial guidance during divorce allows you to make informed decisions that protect your future, not just settle the present.
Stay Informed—Stay Protected
The most expensive financial divorce errors are the ones made without full understanding or preparation. You don’t have to be a financial expert—but you do need to be informed.
At MJT & Associates, we help clients protect their finances in divorce by identifying risks early and creating forward-thinking plans for the future.
You only get one chance to divide your marital estate. Make sure it’s done with clarity, confidence, and care.
