Common Financial Pitfalls in Divorce—and How to Avoid Them

Divorce isn’t just an emotional journey—it’s a financial one, too. And in the middle of the stress, it’s easy to overlook important money matters that could impact your future for years to come. Whether you’re just beginning the process or finalizing terms, here are some common financial pitfalls to watch out for—and how to avoid them.

1. Underestimating Living Expenses

Many people assume life after divorce will cost about the same as it did during the marriage—but that’s rarely the case. Two households mean two sets of bills, and even small expenses can add up quickly.

Avoid it by:

Creating a detailed post-divorce budget early on

Including hidden costs like insurance, child care, or therapy

Being realistic (not hopeful) about your income and lifestyle

2. Fighting to Keep the House Without a Plan

It’s natural to want stability—especially if kids are involved. But keeping the family home can become a financial burden if you can’t afford the mortgage, taxes, and maintenance on your own.

Avoid it by:

Looking at the long-term cost, not just emotional value

Weighing whether selling or downsizing makes more sense

Considering alternatives like nesting (temporarily sharing the home)

3. Not Understanding the Value of Retirement Accounts

A $100,000 savings account is not the same as a $100,000 401(k). Why? Because retirement accounts often come with tax consequences and penalties.

Avoid it by:

Getting a clear valuation of all retirement assets

Using a QDRO (Qualified Domestic Relations Order) if needed

Consulting a financial advisor before agreeing to any division

4. Overlooking Marital Debt

Dividing assets is one thing—but dividing debt is just as important. If you’re not careful, you could be left responsible for debts you didn’t even know about.

Avoid it by:

Running a full credit report

Listing all joint debts (credit cards, loans, etc.)

Including clear language in your divorce decree about who pays what

5. Making Emotional Decisions Instead of Strategic Ones

Divorce is emotional—but financial decisions should be logical. Some people give up too much just to “get it over with,” while others fight over everything out of anger or fear.

Avoid it by:

Leaning on your attorney and/or financial expert

Focusing on long-term security, not short-term satisfaction

Protecting your peace and your pocketbook

6. Forgetting to Update Legal and Financial Documents

Your divorce decree is done—but your name might still be on accounts, policies, or beneficiary forms.

Avoid it by:

Updating your will, power of attorney, and insurance policies

Removing your ex from joint accounts and shared logins

Making sure beneficiary designations reflect your current wishes

Please contact us today to determine the best way to navigate your legal options. Book your consultation today to start the process by clicking here or give us a call at 832-844-1677.

Attorney, Ashley Nicole Green is a  family, divorce, and child custody attorney who services clients in Houston, Harris, Fort Bend, Brazoria, Galveston, and Matagorda County! Contact the Law Office of A. Green today to schedule consultation!

You can always connect with us via phone 832-844-1677 or via email at agreenteam@lawofficegreen.com