Sorry Honey, We Can’t Afford To Get Divorced

When considering a divorce, many people expect a certain amount of legal fees as the entry point for divorce. But life after divorce in today’s economy is a financial impossibility that most find out only when they’re experiencing the financial fallout.

Divorce can be a three-year process (or longer) of ongoing litigation and associated costs, not to mention the emotional wear and tear on every member of the family. The cost of life after divorce, however, is based on the costs associated with parenting. Specifically, where children live will affect the amount of money people have left over to look after themselves for two reasons:

1)      If children are residing primarily with one parent, the other has to pay child support which comes from after tax income. This means by the time they’ve paid their taxes and support payments there often isn’t a lot of money left over for typical day-to-day expenses.

2)      If living arrangements for children are shared, both parents may be impacted equally regarding work and responsibilities. When one parent becomes the primary caregiver for the children, his or her ability to work in a full-time job becomes challenged with the need to balance work with school pick up and drop off, groceries and doctors appointments and other responsibilities in running the home.

Naturally, the specifics are dependent on the ages of the children, but when children are young and unable to be left alone this makes it increasingly difficult.

Couples considering separation should do very detailed weekly, monthly and yearly financial budgets to understand what their current expenses are and may be in the future, including where they can cut back:

• How many of their expenses are only possible if shared (i.e discounts as a result of marriage or luxury expenses)?
• Is lifestyle driven by the income of one partner only?
• Does either partner have an inconsistent work history or a career that makes planning a virtual impossibility?

Most people with unhappy relationships have a fantasy that they’ll be better off without their partner. While this may be true emotionally, financially, it is a different story.

Frequently when couples separate their expenses increase by 20 – 30K a year due to supporting a second household, this includes loss of discounts received (i.e. multi-car insurance discounts), and the need for multiple items for children at two homes (i.e. computer, internet, clothing, etc.), as well as the possibility of child support payments and spousal support payments.

If a couple looks at their budgets and realizes that separating is in fact a financial impossibility they have a few of choices:

1)      Find ways to cut back expenses. Frequently this comes from the loss of what they do for the kids (i.e. programs, camps, etc.).

2)      Go for marital counseling and learn how to create a relationship that will support a new way of working positively together in their marriage.

3)      Decide to co-exist amicably under one roof as a separated couple and re-visit their situation when the kids are older.

Trying to get the same income to support two homes instead of one is the financial proposition of divorce – plus the added costs of the divorce process itself. With job instability and rising costs of living, couples considering divorce will want to start at the spreadsheets before committing to throwing in the towel.

Stephen Rosenfield is a Toronto Family Mediator and Founder of Canada’s first ever Family Support Expo taking place at the International Centre on Saturday October 20^th and Sunday October 21^st.  You can follow him at @famsupportexpo