Can I Afford to Get Divorced?
Facing a divorce is stressful, especially when you are not sure how it will impact your finances. How will you afford your monthly expenses? Is there a chance that you might have to move or seek different employment? These fears can keep you from pursuing a divorce, even when you know it is the right decision for you. Taking control of your financial situation, however, will help you move forward confidently.
Splitting One Home Into Two
On a basic level, divorce will always tighten your budget. By separating one household into two homes, you decrease your household budget. For example, if you and your spouse each $50,000 a year, your current household income is $100,000. That will go down to $50,000 for each of you when you divorce. But it is important to note that spouses rarely earn the exact same amount; you should talk to your lawyer about what amount of alimony or child support you may be receiving or paying after divorce. Once you have an estimate of your post-divorce income, you can see how it compares to your budgeted expenses. You can then decide what expenses you can cut or decrease, and which ones you need to keep.
Keeping the Marital Home
You may have strong emotional ties to your marital home, particularly if you have children. While it might be nice to stay in the home, you need to make this decision from a practical financial standpoint rather than an emotional one. If the mortgage is in both parties’ names or your spouse’s name, you will need to check with a mortgage broker to make sure you will qualify for refinancing after the divorce. Your mortgage broker can also tell you approximately what your new monthly payment would be, so you know if you can afford it. Whether you own or rent, you may need to downsize post-divorce to make your overall budget more manageable. The earlier you start looking at housing options, the more you will know what is out there and what might work for your family.
Splitting Retirement Accounts
Getting divorced forces you to take a hard look at your retirement plan. Many people do not realize how little they have set aside for retirement until they have to divide it in a divorce. While this does add financial stress to the divorce process, it is also a great opportunity. Most married couples are never forced to take a realistic look at their retirement finances. Moving into this new stage of your life is a great time to sit down with a financial advisor and make a plan for how to accomplish your retirement goals. While it can be more challenging to plan for retirement as a single person, taking a proactive approach now can put you in a better place for retirement than if you had stayed married.
Returning to Work
As you evaluate your finances, you may realize you need to return to work or get a higher paying job. A job search can be lengthy, but the divorce process can be, too. Finding a new job can also seem like an overwhelming task. You may be tempted to put off your divorce until you have your new job lined up. But without a timeline in place, it is easy to put off your job search or only do it half-heartedly. Since both processes can be lengthy, doing them simultaneously provides motivation and helps you move forward with your life as a whole. You do not want to find yourself months or even years down the road still in an unhappy marriage because you made getting a new job a barrier to starting the divorce process. For practical tips on your job search, read our blog How to Return to Work After Divorce.
Hiring an Attorney
Hiring an attorney is an additional and unexpected cost of divorce. Most people do not have an emergency fund set aside in case they need to hire a lawyer. While representing yourself is an option, it is a risky one. How your assets and debts are divided in a divorce can have long term financial consequences. The amount of alimony or child support you pay or receive will immediately impact your budget. Hiring a lawyer is an investment in your future. Borrowing funds from family or putting attorney fees on a credit card can make a lot of financial sense in the long run, because your interests will be protected. It is also important to work with a firm that uses client-friendly payment options, such as flat fees and payment plans.
Contact Porchlight: An Experienced Family Law Firm
While you may be wondering whether you can afford to get divorced, it is important to understand that it could be even more costly to stay in an unhappy marriage. The longer you wait to file for divorce, the more marital debts and assets you will accumulate – and then have to divide. This can make a future divorce even more costly. It also delays your opportunity to become financially independent and begin planning your future. If you are still unsure about affording divorce, contact Porchlight at (678) 435-9069 or porchlight.law, to discuss your options and take control of your situation.