The statistic that has been quoted for years is that half of all first marriages end in divorce. The reasons are many, but to the people involved the reasons don’t really matter. In most cases the reasons are not financial, which lends itself to the idea that regardless of the “why” neither party wants to get a divorce that will cost them a lot of money now and in the future. Now there are stories on both ends of the process who will tell you they got the short end of the financial stick when all was said and done. Adults who are not living with their parents, and see it as the absolute worst thing that could happen to them, need a reasonably solid financial foundation to move on with their lives. But divorce tends to make that idea more chaotic than real.
To avoid the likely financial chaos that comes with a divorce, you might start considering a long term perspective before you dash off to the lawyer. You may discover the actually underlying problem is money, and be able to work together to navigate your way through the troubled waters. Whatever you decide, consider these five financial reasons to avoid divorce court.
1. A divided house cannot stand.
This is both true in a relationship and when it comes to dividing the assets of the marriage. One of the most common things for people to overlook is the comfort and familiarity of the house they are sharing – in good times and bad. Looking around, you will see the memories of years scattered all across the room. From a financial perspective, chances are the house will be sold and each will get half of what is left. But that after-sale cash is not likely to give you the same lifestyle you enjoyed with that necessary but uncomfortable mortgage you shared each month.
2. There are people who look to take financial advantage of your situation.
These people are always on the hunt for distressed couples willing to sell their distressed homes just to get the best deal possible. If the divorcing parties step back and take a breath, they will find it is better to wait for the best time to sell the house and make the maximum profit on its sale. The worst decisions are usually made in anger or under significant stress. When cooler heads prevail, it usually works out in everybody’s best interests.
3. Multiplication by division.
When two people divorce, most of the expenses are doubled. For example, instead of paying one mortgage, the two people are paying two rents or a mortgage and a rent. Utility bills that were shared are now doubled. (In case you doubt this, do you really think that you will use a significantly less amount of electricity or gas because you are living alone?) In the end, the winners will be the landlords, utility companies, and any other business that will be happy to take the extra money.
4. Paying the lawyers.
Unless you are living in a cardboard box, chances are you have a significant number of assets that will have to be sifted through and legally divided between the two of you. This may seem simple at first, but experience shows that most divorcing couples fail to realize the investment they have made in the marriage. The value of life insurance policies, accumulated gifts, furniture, appliances, and other commonly used items taken for granted will be part of the division. Having been together for so long, people don’t stop to consider how much it will cost them to replace everything from silverware to plates to the Cuisinart to the vacuum cleaner. The lawyers will have to get involved, and the result is spending money times two (see Multiplication by Division above). The more assets you have or the longer the divorce proceedings last, the more you each pay.
5. Historical common sense.
Most people who are reading this are old enough to remember the Great Recession of 2007. A little known fact is that many people who were considering getting a divorce when the recession hit were willing to postpone the separation of property and person to be able to financially survive. No one knew how long the difficult economic times would last, and the two people found enough commonalities to stay together and wait out the storm.
While no statistical proof exists for the exact number of those couples that ended up getting a divorce once the financial crisis was over, there is plenty of evidence that shows the time spent together made the importance of short term issues fade away. The statistics show that there were 3.6 divorces per 1,000 people in 2007 and 3.6 divorces per 1,000 people in 2010. By 2015 the rate was down to 3.1 per 1,000 people.