I divorced long ago and wondered at the time “will my living costs go way down after divorce?” As too many people are aware, divorce is hard at many levels beyond the economics of divorce. For example, ending a marriage relationship, the stress of the divorce process itself, impacts on kids, social stigma, who gets the friends, dividing household contents, new daily logistics, etc…..and “shut the front door” who knew the monthly living costs wouldn’t change that much!
Down Go the Living Costs After Divorce, Right?
Reality check on the economics of divorce. Don’t expect your costs to cut in half!
Just because two people are now one person doesn’t mean 100% of monthly costs are now 50%. Let’s take a look at simplified example for major monthly budget items. This assumes two parents with two kids with one parent keeping the family house and the other renting as well as post taxes and no alimony. Of course, your situation will be different from this example.
The key point is that the new costs are not 50%! Two households cause lots of other twice overs and other extra costs. Utilities, insurance, household maintenance, cable/internet, groceries, and more. In addition, there are new expenses that perhaps weren’t part of the “family household” like counseling for kids and yourself or child support/alimony. Other impacts are increased costs for social support activities with friends and family or having to re-enter the workforce with new clothes, commute costs, and childcare. Above all be prepared and aware!
Bringing the full picture together in this example, the grand total costs are $3660 + $3875 = $7535. That’s a combined 151% of the Married Costs! Not an easy hurdle to figure out amidst the many moving parts of divorce.
What Worked For Us
It’s MUCH easier to talk about this now than back in the day! Nonetheless at the time we sought the greater good concept in guiding decisions. What’s the best interest of our kids in the reality of the newly defined family of two households. We couldn’t handle a 151% scenario, so as parents we made short term financial changes for cutting back expenses, not saving for a time, and trying to be flexible working together.
In our case, she kept the family house and I rented leading up and even shortly after the divorce. We ended up selling the family home…and couldn’t have picked a worse time at the bottom of the real estate crash in 2010. Keeping the family home was simply unsustainable and the timing absolutely stunk! As a result our house had a $100,000 market pullback from just a couple of years before.
Sometimes you have limited flexibility in your situation and what is reality is stark reality. I swallowed hard many times over….and kept moving ahead! Beyond the major expense item of the housing, we worked together for other living expenses to make sure the kids continued to grow and develop for their best paths.
What to Do?
Be aware, look ahead, and be smart! The best case: know your specific cost and income estimates BEFORE getting divorced. Then figure out a “winning as possible given the situation” solution in the divorce process. Go into this eyes wide open and contain the financial impacts! You may need to be creative and open to radical changes like selling the family house or alternative living arrangements.
Importantly give yourself permission to not have your “stuff” together. Whatever the combined budget – 120% or 180% or 90% – the post divorce finances are hard stuff to work through while many other divorce impacts are hitting at the same time. Needless to say it can be one big pile of an emotional as well as financial mess! Sometimes you just need to put your head down and plot ahead one step at time with intention and doing the best you can to survive the moment. Things will shift and come together as best as they can!
Community Conversation Questions:
Please share some of your thoughts, stories, and perspectives around your post divorce financial transition.
- What was it like financially as you moved through your divorce process?
- How did you make the hard decisions as you made the transition into your new situation?
- What winning approach, act, or thoughts did you implement to keep moving ahead?
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