Divorce is ugly. 😭 There’s not really a price to be put on the sadness, anger, hurt, and all that comes with a divorce. Not only that but your Paycheck, and everything connected to it, can get turned upside down and blown up! How should a smart Paycheck think about divorce? Is there anything that can be done?
Here are Five Fast Facts about divorce and Paychecks:
- ⏳ Don’t Dawdle - It’s probably obvious to say, but the longer you drag out the divorce process, the more it’ll cost you. It can range from just the filing fees of a few hundred bucks up to tens of thousands of dollars (or more) in a nasty, long, legal battle. If you can somehow work together to peacefully divvy up your stuff, it’ll not only be less stressful but also much cheaper and faster. The lawyers have enough ice already, they don’t need more because of your bickering!
- 💲 The Tax Man Cometh - Naturally, even in times of great trial and tribulation, Uncle Sam will get his due. Different places have different rules about splitting your assets (and debts), but you can be sure that there will be taxes to pay no matter what! Talk to a tax professional so you can reduce that as much as possible, or at least have a plan ready. Between the lawyers and the feds, it’s a wonder anyone walks away from a divorce with any money left over, isn’t it?
- 📝 Loads Of Details - Pretty much every part of life gets turned over in a divorce. Make sure you think about and plan for things like insurance, health care, closing shared accounts or credit cards and opening individual ones, living arrangements, who pays which bills going forward, and so on. Particularly if you’re not the primary income earner, these things will be critical to address once you’re on your own.
- 🧒 Ah, The Kids - There’s no sugar coating it: the kids get stuck in the middle here. It’s terrible, but you have to move forward somehow. You have to figure out new day care arrangements, school pickups and drop-offs, clothes shopping, food, activities, and on and on. No matter how you do it, if you’re flying solo it’s likely that you’ll have to pay more to help care for the kids. To borrow from that old saying, try to find a village…
- 💡 Silver Linings…? It’s not all terrible news on the Paycheck front. Divorcees report that they have easier budgeting and more control over their money, they potentially get better investment returns and financial aid for college, and more Social Security perks. It can also give you an opportunity to reset your financial health, put things into perspective, and start over with a better direction and bottom line in the long run. No one wants a financial and emotional enema, but if you can’t avoid one at least you’re all cleaned out afterward!
🔥Bottom line: If you have to work through a divorce, make sure you do it right. Use mediation or arbitration rather than let it go to the courts - it’ll save you time and money in the end, keep your private business more private, and give you more control over the outcomes. Be thorough and fair, be willing to compromise, and plan for long term things like child support, college, and retirement. The better you do at this, the more likely you will be able to move on and restart your life!
What’s the best financial divorce advice you’ve ever heard?
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