Divorce is frequently perceived as a legal issue. And it is to some extent. After all, a divorce cannot just be granted; it must first be filed with the appropriate court. However, look closely at what transpires in a divorce. In that case, you'll discover that it's less about the law and more about negotiations and financial considerations (and parenting, if you have children). There’s no precise formula for how to go about a divorce. Therefore, it will be up to you and your soon to be ex to bargain a monetary settlement that you deem fair and equitable.
Since every person's situation is different, it would be hard to include a comprehensive list of everything you should be considering. However, before you file for divorce, you should consider the following questions regarding your finances.
It's a widespread misconception that you gain money from a divorce. However, in practice, all it does is add costs. Now that your lives are divided, you will have two of everything. Two mortgages to pay, two energy bills to pay, two health insurance policies, etc. Those volume discounts, such as the multi-car discount on your auto insurance or the family share plan for your cell phones that you receive when you get married, will also be lost.
If you frequently carry credit card amounts from month to month, you should consider how it will affect your finances after your divorce. Are the outstanding charges on your credit cards the result of a one-time expense for which you lacked the necessary funds? Or do you supplement your daily living expenses with credit? If the former, you can settle that debt and carry on. But pursuing a divorce can only make a tight situation even tighter if you're utilizing credit to augment your income.
These issues must be discussed and documented if you want to settle on alimony.The foundation for reaching a compromise on this contentious subject is understanding your post-divorce expenses and how long you will require support to cover them. In the United States, there are hardly any alimony formulas. Negotiation is the only option. Make sure you select a divorce strategy that emphasizes bargaining as you prepare to divorce.
When financially preparing for divorce, the second thing to consider is if you want to remain in the family home. You need to consider and be honest about your ability and want to pay for house upkeep and repair in addition to needing to pay the mortgage and utility costs.
How much does it cost to keep the yard up? It might add up quickly if you hire others to complete this work.
How old are the siding, shingles, driveway, or roof? These are major repairs that might run between $10,000 and $30,000.
How old are your water heater, air conditioner, furnace, etc.? These are significant fixes that might cost between $2,000 and $10,000.
Are there any appliances that require replacement soon? Washing machines, dryers, dishwashers, and other appliances can range in price from a few hundred to a few thousand dollars.
Although you might be able to make ends meet to pay the mortgage, what if something goes wrong? Are you able to afford to remain there?
And how will being at home and straining to make ends meet affect your ability to retire or fund your children's further education?
Be careful to obtain the assistance of a divorce mediator as soon as your divorce is filed. In addition to helping, you carry out your divorce peacefully, mediators will be able to examine these costs and assist you in deciding whether or not it makes sense for you to continue living in the home in your unique circumstance.
The final thing to consider when financially preparing for divorce is: How much will your new life cost?
The cost of living can change significantly over the course of a marriage. Are you up to date on what three-bedroom apartment costs today? Things like groceries, internet packages, and more all add up. It is important that you prepare yourself for these realities beforehand and set your expectations accordingly. You will likely have to adjust your lifestyle after a divorce.
At the end of the day, divorce is a life altering process. Make sure that you prepare yourself financially before you begin that process. And know your divorce options. If you are interested in a peaceful and collaborative divorce, reach out to our team here at Solutions & Resolutions for mediation services.