Your divorce settlement will determine the foundation for the next chapter in your life. The choices you make during this process will affect your finances, routines, stability, and even your peace of mind. That’s why it’s important not to let emotion drive your choices, and instead, think strategically about what you actually need.
It’s the best way to move forward without draining your time and energy.
- Get clear on your non-negotiables
Before you start negotiating numbers or property, you need a solid understanding of what assets you need and why. Most people start the divorce process thinking they just want everything they’re entitled to, but that’s too vague and will only drag out the conflict. And high-conflict divorces can cost up to four times more than cooperative ones, thanks to additional litigation and attorney fees. By seeking professional help for your divorce, you’ll have the support needed to avoid the issues that escalate divorce before it becomes a costly war.
First, define your non-negotiables. Not everything can carry equal importance if you want a smooth outcome. Set your boundaries by clarifying what you absolutely must have. This might include long-term housing stability, retirement protection, or parental rights. If you skip this step, you could spend thousands of dollars fighting over things you don’t necessarily need just because you don’t want your spouse to win.
Next, identify your “nice to haves.” These are things you’d like to have but don’t need badly enough to trade your emotional energy to get them. Knowing what falls into this category will give you more negotiation power. You won’t slow the process down by holding out for something you don’t really need.
Last, acknowledge what you’re willing to let go. These are things you aren’t willing to fight for, and when you define them, you’ll be more efficient. Sometimes walking away from assets is worth the freedom and lack of stress.
The clearer you are about these things up front, the easier it will be to avoid dragging out your divorce over things that don’t matter.
- Understand your financial reality post-divorce
Your financial situation is going to change after your divorce, and it’s important to know exactly what that will look like. You’re going from two incomes to one, and that means you’ll probably need to make some lifestyle changes.
When you figure out your finances early on, you’re more likely to make strategic settlement decisions because you’ll be able to spot an unsustainable proposal right away. This is crucial because if you underestimate your financial needs and accept a poor offer, it could put you into a bad financial situation.
Take inventory of all your assets and debts. This can include your retirement accounts, credit card debt, investment portfolios, tax obligations, and more. Without a full view of your financial situation going into the process, you’ll just prolong your divorce.
Most importantly, consider the long-term impact of potential outcomes. A lump sum might look good on paper, but it might not support your retirement. It’s crucial to analyze how every choice will affect your life over the next decade or more. For instance, divorce can cut a woman’s retirement savings dramatically – by up to 41% according to statistics.
Calculating the reality of your financial situation will put you in control rather than being at the mercy of the process.
- Prioritize your children’s needs but don’t lose sight of your own
If you have kids, then custody, routines, and financial obligations will be the most emotionally taxing part of your divorce. Don’t make any decisions under stress because you might make the wrong choices.
Build a parenting plan around stability for your kids. Kids need consistency more than anything. Focus on what will protect their school performance, sleep patterns, and emotional safety. And unless safety is an issue, make sure your child is able to maintain a healthy relationship with their other parent. Parental involvement is crucial for their emotional, social, and academic health.
- Factor in hidden financial consequences
Each choice in your settlement will have additional effects, and sometimes it’s financial. Some things will come with extra financial obligations that can be a surprise. Something that looks fair on paper might become a huge financial burden in the form of tax liabilities, penalties, and legal fees. For instance, the Tax Cuts and Jobs Act made alimony not tax deductible for the payer. This is where you’ll get a huge advantage by hiring a divorce attorney rather than trying to manage things on your own.
Fight for the settlement that supports your future
Many divorcing couples approach their settlement as a game to be won, but that’s the wrong approach. Instead, get serious about how it will impact your future and make your decisions based on what’s in your best interests long-term. The goal isn’t to get the most; it’s to get the right things so you can move on with your life.
