I see it all the time. Smart, capable people going through divorce making financial decisions that cost them thousands, sometimes without realizing it until it’s too late. Not because they’re careless. Because nobody actually explains how this works.
Colorado sees roughly 23,000 divorce filings every year. The financial stakes are high in nearly every one. Whether you have a house, a retirement account, or significant shared debt, the decisions you make now will shape your financial life for years.
These are the four most common mistakes I see, and what to do instead.
Keeping the house without running the numbers
The house feels like stability. Something concrete to hold onto when everything else feels uncertain. I understand that.
But keeping the house means refinancing the mortgage on a single income, at current rates. It means property taxes, maintenance, insurance, and HOA fees, all of it, alone. For a lot of people, that burden quietly compounds over years.
Sometimes keeping the house makes complete sense, especially when children are involved and stability matters. But the decision should come from math, not emotion. Run the numbers before you commit, not after.
Our Divorce Cost Calculator is a good place to start.
Overlooking retirement accounts
The 401(k), pension, or IRA sitting in the background of your marriage is often the largest financial asset you have. And it gets less attention in divorce negotiations than almost anything else.
People focus on the immediate stuff, cash, the house, the cars, and give away long-term security without fully understanding what they’re signing away.
Dividing employer-sponsored plans like 401(k)s and pensions isn’t as simple as splitting a bank account. These require a separate legal document called a Qualified Domestic Relations Order, a QDRO, to divide them without triggering taxes or early-withdrawal penalties. The IRS has specific requirements for what a QDRO must contain. Getting it wrong means starting over, or worse, losing access to funds that are already gone.
IRAs work differently. They don’t require a QDRO, but they have their own transfer rules that must be followed precisely.
This is exactly the kind of thing worth working through in a divorce coaching session before you finalize anything.
Ignoring the details of shared debt
Debt doesn’t disappear in divorce. This surprises more people than it should.
When a debt is assigned to your spouse in your divorce agreement, creditors don’t care. If your name is on a joint credit card, car loan, or mortgage, you’re still legally responsible if your ex stops paying, regardless of what your decree says. That affects your credit score, your ability to borrow, and your financial stability in ways that are genuinely hard to undo.
The cleaner path: close joint accounts where possible, refinance jointly-held debt into individual accounts, and address everything explicitly in your agreement. More work upfront. Much less pain later.
Rushing to get it over with
This is the most expensive mistake, and the most understandable.
Divorce is exhausting. There’s a point in almost every divorce where one or both people want it done. In that state, it’s tempting to agree to things that don’t actually work long-term, just to stop the process.
A rushed agreement that doesn’t hold is often more expensive to fix than the original divorce. Modifications, enforcement proceedings, post-divorce corrections, these add up fast, and they come with renewed conflict.
The goal of mediation at Open Space Mediation is to move efficiently, but not so fast that you’re signing away things that matter. Mediation typically costs 40 to 60 percent less than litigation, according to the Colorado Dispute Resolution Act. And our flat-fee packages mean you know what you’re paying before you start.
If you’re navigating this right now and want to understand what your options actually look like, book a free consultation here.
Open Space Mediation serves Colorado couples seeking a dignified, cost-effective path through divorce. Liz Merrill is a professional mediator, not an attorney, and this post does not constitute legal advice.
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