Top 5 Money Mistakes Divorcing Couples Make (and How to Avoid Them)

Top 5 Money Mistakes Divorcing Couples Make (and How to Avoid Them)

By Kristen Shearin, JD, CDFA® On 01/07/2026

Divorce is part legal, part emotional, and part financial. Too often, people put all their energy into the legal fight or the emotional healing — and neglect the financial piece. The result? Costly mistakes that can drain your future.

Whether you’re focused on the emotional toll of your divorce or simply trying to figure out how to divide assets, the financial decisions you make now will echo for decades. The good news? With the right strategy (and the right support team), you can avoid the most common pitfalls and step into your next chapter empowered.

Here are the five biggest financial mistakes I see in divorce — and how you can avoid them.

1. Forgetting About Taxes

On paper, two assets might look equal. But here’s the truth: a $50,000 savings account and a $50,000 IRA are not the same. One is post-tax money you can spend tomorrow. The other may be locked up until retirement — and when you take it out, Uncle Sam will want his share.

I’ve seen clients agree to lopsided divorce settlements because they focused on numbers instead of tax consequences. They thought they were splitting things “fairly,” only to realize later that one spouse walked away with liquid assets while the other got tied-up accounts worth far less in real life.

Avoid it: Always look at the after-tax value of assets. A CDFA® professional can run the numbers and show you how taxes change the picture — so you’re not surprised years down the road.

2. Fighting to Keep the House at All Costs

The family home feels like security, especially for kids. It’s memories, comfort, and a sense of stability. But here’s the financial reality: keeping the house without a realistic plan can become an anchor that sinks your budget.

Think of it like buying a flashy new car in January as part of your “new year, new me” resolution — only to realize the insurance, gas, and maintenance are eating you alive by March.

Avoid it: Run a full post-divorce budget before agreeing to keep the house. Look at mortgage payments, property taxes, utilities, maintenance, and insurance. If the house leaves you cash-poor, it may not be worth it. Sometimes, selling and splitting proceeds sets both spouses up better in the long run.

3. Overlooking Hidden Assets (and Debts)

Hidden assets aren’t always sinister. Sometimes it’s just a forgotten HSA account, unredeemed airline miles, or a Venmo balance. Other times, it’s more deliberate — think crypto wallets, side accounts, or debts you didn’t know existed.

I once had a client discover a secret PayPal account holding thousands of dollars — not because their spouse was hiding it maliciously, but because they simply forgot it existed. On the flip side, I’ve also seen spouses hide debts, leaving the other on the hook after the divorce decree.

Avoid it: Create a master list of accounts, cards, loans, memberships, and apps. If money can move through it, it belongs on the list. A CDFA® professional knows where to look and what questions to ask so you don’t get blindsided.

4. Failing to Plan for Future Expenses

Divorce agreements that only focus on “today” are a recipe for conflict tomorrow. Kids will still need braces, laptops, sports, summer camps, and eventually college. Health care costs, retirement contributions, and inflation also don’t pause just because you finalized a settlement.

Skipping this step is like setting a New Year’s resolution without building in long-term habits. Sure, you can crash-diet your way through January, but by April you’re back to old patterns — and frustrated.

Avoid it: Put it in writing now. Even if you can’t predict exact numbers, agree on how you’ll share the costs of child custody expenses, tuition, and medical bills. Clarity upfront prevents fights later.

5. Skipping Professional Help

This is the biggest mistake I see — and the most preventable. Many people think hiring a financial expert will cost too much. In reality, not hiring one often costs far more in mistakes, overlooked tax impacts, or bad settlement terms.

Here’s the reality: divorce is one of the most complicated financial transactions you’ll ever face. You wouldn’t perform your own root canal, and you wouldn’t represent yourself in court. So why would you go through a divorce — with all its legal, emotional, and financial complexities — without the right professional support?

Avoid it: Work with a CDFA® professional. We’re like your financial GPS in divorce: mapping the road ahead, recalculating when things change, and keeping you from driving off a cliff. Attorneys guide the legal process. Therapists guide the emotional process. But a CDFA® professional helps you project what life after divorce will look like — your budget, your retirement, your long-term goals.

Divorce isn’t just about dividing the past; it’s about building your future. The divorce process can feel overwhelming, but when you avoid these common mistakes, you protect not just your wallet, but your peace of mind.

Remember:

• No fault divorce might take the blame game out of the courtroom, but it doesn’t take the math out of your checkbook. The paperwork may be simpler, but the finances rarely are.
• Spousal support and alimony aren’t one-size-fits-all — especially in long-term marriages.
• New divorce laws in 2025 could impact settlements in certain states.
• Divorce statistics consistently show that finances are a leading cause of divorce — and one of the hardest parts to untangle after.

Which is exactly why no one should divorce without a CDFA® professional.

Tagged with: cdfa, financial mistakes, divorce support

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