The decision to seek a divorce is informed by many different factors. A major one is often concern about the economic fall-out of a divorce. After all, divorce can frequently mean supporting two households on the same income as previously supported the intact family. In the current economic downturn, economic concerns are front and center in the decision whether to file. Recently I discovered the following article, which provides significant food for thought on evaluating how the economy of your family life is pertinent to your decision whether to file for divorce at this time.
By SUZY BROWN
Some experts say if your marriage is shaky, a downturn in the economy will make it more likely that you will divorce. Others says that a bad economy can be good for your marriage. This economy is definitely creating challenges that one doesn’t see in a more stable financial situation.
Surveys of attendees at my recent divorce recovery camps revealed that a 52-year-old woman was living in her car. Another was temporarily in the Super Six Motel. Another attendee and her ex-husband were still living in the same house because they have not been able to sell their house, and they could not afford two mortgages.
Researchers have tried to figure out the correlation between the economy and divorce, and they often come up with differing conclusions. Whether a downturn in the economy increases or decreases the likelihood of individuals divorcing depends on many factors. Money issues in individual families have always been high on the list of causes of divorce. However, when the financial stability of the whole world plummets, and everyone is feeling the pinch of tough economic times, couples either:
1. Decide to try to weather the troubles in their marriage and make extra efforts to stay together, or...
2. Realize that their personal situation is getting worse along with the deepening financial crisis and head straight for the divorce attorney’s office.
This challenging economy will hopefully make borderline couples give their relationship another try before divorcing. They may seek counseling from professionals or attend couples retreats sponsored by a religious community to develop a new intimacy and stronger bonds in their marriage. A clear, hard look at finances may cause a couple to establish new commitment to the marriage and can get them on their way to a more intimate partnership.
However, if divorce is inevitable and the relationship irretrievable, the decision to divorce can be accelerated by the extra stress of this financial climate. Those who decide to divorce should keep in mind that the divorce process in itself can be expensive. Two houses demand more to maintain than one.
Consulting and attorneys fees add up. Physical illness and emotional distress often show up during divorce, which can be costly. Providing for children, even those in joint custody, can create additional expenses. In some cases the decision to divorce depends on where a couple is in the process and what kind of advice they are getting. An attorney in West Palm Beach, Fla., posted the following on a recent blog:
“If you are the major bread-winner of your family, now is a good time to get a divorce. You will be able to buy your spouse out of the marital home for a bargain basement price. That is, if you can get financing. As far as division of marital assets and debts is concerned, if your retirement plan took a recent hit on Wall Street, that is that much less you will need to split with your spouse. If your spouse is irresponsible with money, a shopaholic, or high maintenance, now is the time to get rid of him or her. If your job is at risk, or bonuses are not forthcoming, your alimony obligation may also be lower. Make it unmodifiable or a lump sum in the negotiations! Child support may be lower too, if your passive investment income is down.”
The blog went on to say, “If you are the dependent spouse, a divorce may be just the thing to protect your good credit! You may need it to buy a condo or townhouse when the credit freeze eases. As to credit card debt, try to pay at least the minimums each month for the same reason.” The blog continued, “So if you are thinking about divorce, there are many favorable economic reasons to start divorce proceedings in this bad economy.”
Couples should be wary of advice that weighs heavily on one side of the scale or another, or seeks to punish one party at the expense of children or the ex-spouse. Beware of advisors who are more in the business of shoring up their own bottom line rather than crafting a settlement that is as fair as possible for both parties. Settlements that are unfairly skewed one way or another almost always cause problems down the road. In cases where a couple is already in the process of divorce, this economy forces everyone involved to figure out new ways to structure the settlement. Couples and their attorneys and financial consultants have to be creative, and do their best to equalize both benefits and losses in the final divorce agreement.
Divorce almost always means selling and buying houses. In this market with house values at all-time lows and financing questionable, selling and buying a house becomes much more difficult. Even if you are able to sell your family home, the value is often below what you paid for it, and especially for a woman who has been out of the work force for a significant amount of time, getting financing for a new home is often difficult. These realities will alter the settlement process. When a couple owns a business together, decisions must be carefully made to insure an equitable outcome.
Some couples decide to sell the business and equally take the loss or the profit. Others decide to continue working together until a better economic climate. Delaying divorce or negotiating the business division at a certain date in the future is also a possibility. Couples may just need to sit tight on certain final decisions until the economic picture improves. Retraining or additional education may also be necessary for one party, and that should be factored in to any divorce settlement and started as soon as possible. In the meantime, both parties will need to cut back on spending. However, psychologists and grief specialists like Therese McKechnie of Shawnee Mission, Kansas, tells us two of the most common ways people fill that emotional void when a relationship fails is by spending and new relationships.
But in this economic climate, using your credit card or dipping into your retirement funds early can create more havoc in both your current and your long-term financial situation. Getting into new relationships is almost always expensive as well. Newly divorced men often try to impress a new potential partner that they have more money than they actually have. Newly divorced women often get into an unhealthy new relationship to feel more secure about their own financial situation. In the meantime the bottom line is getting worse every day. Both men and women can make bad choices simply because they need reassurance to offset feelings of insecurity about the future in general.
Whether you decide to divorce or not, getting solid financial advice from people you trust and taking an honest look at what you need to do to survive financially is the first step for any couple. According to financial advisor Shalon Doney of Merrill Lynch in Kansas City, Mo., “Your dream team would be an attorney, a financial advisor, an accountant and a psychologist. These professionals should be in place as early in the process as possible.”
In either case, face your financial situation head on and budget to keep your expenditures in line with the money you have. Everyone seems to be tightening his or her belt, but those who are anticipating or experiencing divorce, may have to cinch it up more than is comfortable and more than expected. However, remember this fact: money does not buy happiness. One’s attitude toward life and money is much more important than the actual dollar figure in our bank account or portfolio.
Regardless of your situation today, your future is up to you! Your life can be as wonderful or as miserable as you decide it will be. That’s true for everyone. This new economy is forcing all of us to take a serious look at what’s really valuable and hopefully we can focus more clearly on those things. Getting your core priorities straight is helpful whether you end up divorcing or taking this opportunity to make your marriage stronger.
Suzy Brown is an author, speaker and founder of Midlife Divorce Recovery. For more information, see her web site: www.midlifedivorcerecovery.com. She can be reached at suzysuccess@kc.rr.com
