Make Sure You Understand the True Costs
No one wants to think or talk about divorce, but the reality is that it does happen. Many people who plan to get divorced hold the misconception that they will be able to maintain their current financial lifestyle.
“Two can live as one,” As the old saying goes. While it can be true, the norm is that divorce is costly. Not only lawyer fees, but now two separate households must be maintained. Both families will have separate utility bills, property taxes, maintenance fees, etc. If you had two incomes covering expenses, now there will be only one per household.
Even if both people downgrade their homes, it will still be more expensive than they realize. Student loans, credit card balances, and other debts are now the sole responsibility of one person instead of two.
Studies show most divorces are caused by financial stress. Unfortunately, a divorce could compound that stress and lead to a messy divorce instead of hopefully an amicable one. Macropodia data shows the hidden costs of divorce reduce assets by 50% and that divorce is the most significant cause of women applying for welfare.
Nearly half of all American families fall into poverty after a divorce.
It’s not just financial problems but psychological and emotional issues that can arise. Divorce can lead to depression, anxiety, and other mental and emotional issues that affect people’s ability to work and live normally. Often this leads to required expensive psychological and psychiatric help. Plus, there are added hidden expenses if there are children.
By age 50, married couples have nearly four times the amount of assets than comparable couples who divorce. Marriage therapist Kenneth Elliott says couples should strongly consider divorce as the right option.
“Most couples divorce over financial problems, not realizing that financial problems can be fixed,” Elliott said. “They should look at ways to fix their finances before getting divorced, whether working with a budgeting professional, financial planner, debt consolidation company, or accountant. If they can successfully ride out the financial turbulence, most couples will find that they no longer want to get divorced. Long-term, rekindling a marriage is far less costly and stressful than jumping into a divorce.”
If a couple decides to get divorced, they should do everything to make it amicable. It’s best always to consult an attorney; ideally, the couples should work to make the event as compatible as possible.
There are also alternative places to seek help, such as Wevorce. Wevorce offers self-guided divorce solutions that can help couples get divorced in less than 30 days, provide financial mapping so teams can see the actual costs, and provide court-compliant divorce documents.
A web-based service may be a far cheaper way to get divorced, but they often require more personal work, and it is only beneficial for couples seeking an amicable divorce.
Remember, the more drama in your relationship, the more expensive it will be. Try to salvage a marriage if you can. If you can’t, do it right: have a cool head and an honest inventory of how it will affect finances and life.
Remember: Assets, including retirement accounts, will be split, so plan accordingly.
