Divorce: The Financial Realities

Can you afford to divorce your spouse?

Contemplating the end of a long-term relationship is a serious, heartbreaking decision.  Unfortunately, facing the realities of finances is also devastating.  People will advise you to leave your mate if that is what your heart tells you.  If you have children, they will tell you not to stay in your marriage because of the kids.  But if you do leave your spouse, they will not be there to help you financially.

Initially, many of your family and friends will offer assistance.  You can count on some of them to help you move, or even help you get the money for a down payment on a new residence.  But you must accept that they will eventually carry on with their own lives and you will be left to fend on your own.  Now might be the time to consider what your financial circumstances will be. 

 You will be responsible for either rent or mortgage.  Some women remain in the marital home after a divorce.  However, if both of your names are on the mortgage, you cannot force him to leave.  You will have to negotiate use of the residence during divorce or separation proceedings.  In some cases, one spouse can finance a buy-out of the other’s interest in the house.  In other cases, both spouses sell the house, split the proceeds, and move on with their lives. 

If you have children, do not wait to seek child support.  If you have hired a lawyer he will do that.  If you are doing this on your own, you will want to visit your local county child support enforcement agency, taking your marriage license, your children’s birth certificates, and your social security numbers.  Any money he gives you not ordered by the court is considered a “gift” in most counties—and remember, if it’s not court ordered, he can stop “the gift” at any time.  Contact your children’s school to see if you qualify for the reduced lunch program.  Contact your county Job and Family Services office to apply for assistance with food if needed. 

Whether you decide to buy or rent, you must also consider utilities, taxes (if buying), and insurance.   If you are interested in a house or an apartment, call your local electric and gas suppliers to find out how much the average utility bills cost for that address.  Your own use ultimately affects your bill, but some houses cost more to heat or cool than others.  If you are mortgaging a house, include the cost of property taxes and homeowner’s insurance in your mortgage.  If you are renting, purchase tenant’s insurance.  In addition to your utility bills, you should also budget for cable TV, Internet access, and phone service. 

What about your health insurance?  If you and your husband are divorcing, can you negotiate to stay on his employer’s health insurance?  If you purchase your own, either through your employer or through an agent, your cost might depend on your age and past medical history.  You should also calculate the cost of your monthly prescriptions and any regular medical appointments you need to keep.  If you do not have your own life insurance, buy some now.

Do you have any charge accounts you want to maintain after the break-up?  If you and your spouse have joint accounts, make certain they are paid off at the break-up.  But if you have a couple of your own accounts, make certain you can afford the monthly payments.  Pay them off at the end of each month to avoid the accrual of costly interest fees.  If you make even one late payment on them, you stand to lose your credit line, plus you will be responsible for a late fee, and your credit rating will suffer. 

This will be a time when you have to work really hard in order to ensure a sound future.  Keep reminding yourself that you are able to succeed on your own, and you are capable of this hard work, because in the end it will be worth it.