Divorce can be a costly process. Most couples will expect this to be due to things like legal fees and might make plans on how to keep costs down. However, there are some hidden divorce costs which can sneak up on you. To help make sure your divorce doesn’t break the bank, here are a few expenses to be aware of…
Hidden Divorce Costs: What To Watch For
New tax payments
When married, you can file your income taxes as married filling jointly. This lets you generally pay the least amount of taxes. However, you’ll have to go back to filing as a single person again once you’re divorced. This means you’ll end up paying more taxes than you might be used to.
This is one of those hidden divorce costs which you might not consider until tax season is fast approaching. The new tax bill might also lead to more tax costs than you’d expect. Speaking to a tax specialist can help you figure out what exactly your new costs might be.
Real Estate Costs
If you have to sell your house after your divorce, you can encounter some hidden divorce costs in the way of realtor fees and closing costs. You’ll also have to consider any repair costs to the house as well. Furthermore, if you’re selling in a bad market, you could end up with getting less for your house than you originally thought.
You may run into unexpected costs even if you keep the house. If you have to buy out your spouse’s interest in the house, you’ll have to get appraisals on it’s worth. Also, you’ll have to consider refinancing your loan if both you and your spouse were on the loan beforehand.
Most married couples will share one insurance policy due to it’s lower costs. Of course, when you’re divorced, this’ll end. Most insurers will not continue to cover you through your spouse’s policy once you’re divorced. This means you’ll have to plan on getting your own policy once the divorce is over.
Getting back into the workforce can bring its own set of hidden divorce costs. You may need updated certifications or education to match the new workplace standards. While this can lead to higher paying jobs down the line, it’ll still cost money now.
You’ll also have to consider updating your wardrobe to prepare for interviews or workplace dress codes. Plus, you’ll have to consider travel costs to get to and from work. This may mean setting aside money for public transport, gas, or even a new car if necessary.
Divorce costs can creep up when you least expect them. Being aware of the more hidden ones can help make sure your finances stay in order during this potentially stressful time.