Divorce and Money – the Ugly Truth

The ugly truth about divorce and money is that neither of them are easy.  One makes the other more difficult.  Money and divorce go so hand-in-hand that they can work in a circular pattern of destruction.  Money-related conflict can lead to a rift in your marriage and eventually a divorce.  The divorce, in turn, creates even more problems and arguments about money.  There are a lot of contributing factors to this devastating cycle.

  1. Money and your relationship to it. Some are savers, some are spenders.  Some people see money as a means to afford a particular lifestyle for the present while others view it as an investment in their children’s future.
  2. Money and debt. Hard economic times can create daily stress that affects you and your marriage. If you are having problems making ends meet, odds are you suffer from frustration.  That frustration can have a lot of outlets, a primary one being marital conflict.
  3. Money and dishonesty. Some marriages have secret credit cards or banking accounts. That’s a problem.  Dishonesty can run the gamut from the little white lie about how much a new pair of shoes cost to a full blown gambling addiction.  Spouses are supposed to be members of a team, so a lack of full financial disclosure is a huge warning flag.
  4. Money and control. Most of the time spouses do not earn the same amount of money and, occasionally, the primary breadwinner will take hold of the finances and financial decisions. While this can be innocent enough, with one person simply having a “head for money” that the other does not, it can also create a feeling of a lack of control. If one person is handling all of the finances, he or she is also handling all of the financial decisions. The sense of partnership in a marriage can be detrimentally affected by this.

Once a couple’s financial issues have created a large enough rift that a divorce is necessary, things only get more difficult. Often, each person has developed an idea of what the spouse has done wrong, painting a stubborn picture of absolutes that start with “he always” and “she never”.  The blame game of divorce can create an expensive cycle that begins with two attorneys’ fees and ends in a courtroom.

Even more daunting in a divorce is separating one household’s finances into two. Most people live up to their means so if you are a two-income household, now you will each need to create your respective households on one income. This can be incredibly challenging. Each person will have to make some sacrifices and adjustments to maintain an affordable standard of living. Divorce is often already emotionally traumatic. To adjust your current standard of living at the same time can be increasingly devastating.

One of the most challenging financial issues we see in divorcing couples is the family home. The house was selected, purchased, and maintained by both spouses. Upon divorcing, one person must be able to financially support the house payments and upkeep independently in order to keep the home. This is very rarely feasible.

Another issue is removing a spouse from the mortgage through refinancing under one name. If more is owed on the house than what it is worth, or the single income is not enough to maintain payments, refinancing may not be an option.

There are different options in every divorce. In order to make an informed decision, we highly recommend you seek experienced assistance.  Find a qualified CDFA to look at your financial options and long-term repercussions.  The decisions you make now will affect your financial future for many years to come.

We understand that nothing about divorce and money is easy. That’s why we are here to help you lessen your burden.

About the Author

Meredith Dekker

Meredith Dekker, with Dekker Divorce Financial Consulting, is a certified divorce financial analyst in Arizona helping you navigate the divorce process to find a clear path to your financial future.

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