Frequently when I’m talking to a new client, he or she will start of by saying “I’m sorry, I don’t have more saved. Or, “I’m sorry, I made these mistakes in the past.” Believe me, we all, even financial planners, have made money moves we regret.
One that came up recently in a phone consultation was a woman who had to file for bankruptcy because she kept her family home after her divorce. She was beating herself up for that decision, but I have seen it so often.
So, for those of you contemplating divorce, and this goes for men and women equally, let me just lay it out there: DON”T fight to keep the marital home.
Top five reasons
- It’s possible you barely could afford the mortgage and upkeep together. You certainly won’t be able to living off one income.
- The upkeep is a pain as a single person. You don’t have a spouse to stay home from work or help coordinate plumber visits. Unexpected repairs could derail your fragile new single-person budget.
- Bad memories – this is the scene of your marriage ending. Move on to a fresh environment while you heal from this trauma.
- You are staying put to not disrupt the kids or force them to move into a smaller house. Guess what? The kids are disrupted already. Just get them used to the new situation, housing and all, at one time. They kids will recover, and you won’t be broke.
- The better asset to get in divorce is something liquid and that doesn’t have a huge mortgage on it. Think IRAs, investment accounts, pensions, etc.
Renting for the first year after divorce is a good idea. It lets you get your feet under you financially without the pressure of financing a new mortgage and home repairs/improvements.
The lesson here – if you are getting divorced, run away from the home!