This is the next post in my series discussing if one is ready to file for divorce. When a relationship hits a rocky patch, it may be tempting to act impulsively. But filing legal documents is taking a large step and will immediately trigger a series of changes in your life. While a rocky relationship inevitably creates a number of turbulent emotions, it is important to wait to file for divorce when one is clear headed and has considered all of the angles. In today’s post, I will be discussing why it is important to consider your immediate financial situation once you file, and if you are financially ready.
A spouse should take an audit of the household finances prior to filing for divorce
When a couple breaks up, one spouse may assume that they will be granted child support and alimony when the marriage ends, particularly if they have stayed home to take care of children. While this may be true, that does not necessarily mean that the monthly payments they are granted by the court will be enough for them to live on, while maintaining the same lifestyle. If one spouse is not acutely familiar with the household finances and does not make a salary that is enough to support themselves on their own, it is important to take stock prior to filing for divorce.
In most states, monthly child support payments will be calculated according to how many children a couple shares, who the primary caregiver moving forward will be, and the breadwinning spouse’s income. Alimony can be more complicated to calculate, but will usually be awarded based on a number of factors such as length of the marriage, the less profitable spouse’s ability to support themselves, the established lifestyle of the couple, etc. Alimony is often not awarded in perpetuity and may be awarded for a certain length of time until the less financially stable spouse is able to acquire a job or get retrained. For some newly divorced persons, this monthly allowance may be less than what they expected. It is important to have an idea of what kind of realistic budget you will need when you are single.
To begin with, if the couple owns their own home, it is important to know what the mortgage is, and how much equity is in the home. If each spouse has a vehicle, it is important to know what the car payments are. Prior to divorce, the spouse should know how much credit card debt the household carries, how much they have in savings, if they have any other investments and/or retirement savings. It is also a good idea for a spouse to have an idea of how much set bills are, such as utility bills, health insurance, car insurance, monthly phone bills, etc.
Now a spouse must think about what will practically happen if the household income is split in two. Will both partners be able to afford a place on their own? Will the family home need to be sold? While one may not know exactly what kind of monthly financial allowance they will be granted by the court, or how exactly the marital assets will be divided, they should have a basic idea of if they will be able to survive on their own. This can be an anxiety producing experience, but it is important to understand the financial realities before filing legal papers.
Prior to filing for divorce, a spouse should begin to make financial plans if needed
Once a spouse has taken a hard look at their finances, if they determine that they are not financially stable enough to file for divorce, they need to make a plan. They may want to begin applying for jobs, or part time work. They may wish to begin taking retraining classes, or go back to school. If one has been out of the workforce for a long period of time, and money is tight, there are often free classes in the community– for example through the public library– that may be useful to learn basic computer skills or to help with resume writing. If one has family nearby with stable housing, they may also privately ask if it would be possible to stay with them for a certain period of time, if the marriage were to end. If there is violence in the marriage, and one’s safety is in jeopardy, domestic abuse shelters and other groups may also be of assistance in providing immediate shelter.
Dissolving a marriage can come with a number of immediate financial changes. Thinking about these changes prior to filing for divorce can be understandably overwhelming. As a divorce coach, I can help clients talk through their fears, make a list of their bills, assets, and debts, and encourage them to put together an actionable plan. I work with clients all over the country, and all sessions are virtual. If you are considering ending your marriage, but have financial worries, contact me today.