woman feeling problematic about money

How to Prevent a Severe Financial Distress Because of Divorce

Divorce isn’t cheap. On average, it could cost $15,000 individually. It could even hurt the economy.

Writing for Investopedia, Amanda Haury once cited that a high divorce rate could slow down economic growth by reducing the income of a household. The easiest way to understand this is to divide a family’s potential earnings into two.

Meanwhile, the National Bureau of Economic Research cited studies, one of which revealed that family income could decline by as much as 45% if the parents divorced (and stayed that way) for over five years.

Not all marriages end up happily ever after. In many situations, it might be healthier for couples to stay apart than be together. However, how can they avoid getting poorer in the end, especially when they have children?

1. Leave with a Plan

It’s valid for former couples to feel all sorts of negative emotions during the divorce process. But unless one needs to avoid the other at all costs, they need to consider leaving with a plan. They have to:

  • Divide their assets accordingly
  • Define the custody of the children
  • Determine the ideal spousal and children’s support
  • Execute prenuptial agreements (if there’s any)

Fortunately, couples can approach family and divorce attorneys for help. However, because rules can vary between states, a divorce lawyer, for example, can only work with couples whose divorce fits the criteria of the Beehive State.

person holding cash

2. Be Open During Negotiations

Ex-couples need not turn their divorce into a soap opera. By leaving the drama behind, they could shorten the process and even save tons of money:

  • They can spare themselves from having to pay more professionals.
  • They can spend less on their lawyers, who bill their services hourly.
  • They can move on faster and rebuild their finances as soon as possible.

Today, divorce lawyers can lay down multiple approaches, and many of them don’t have to end up in court, such as collaborative divorce and mediation. Regardless of how the former spouses would like to approach theirs, keeping an open mind all throughout is vital to end it quickly.

3. Prepare for the Financial Changes

The reality is that divorce will result in financial struggles for either of the parties. Ex-Partner A might need to pay alimony or spousal support for a long period. Meanwhile, Ex-Partner B might not receive financial support right away. Both will spend thousands of dollars on the process.

Embracing these changes, no matter how difficult, though, will help them prepare themselves financially, especially after the divorce. Even before they sign the papers, both parties can:

  • Begin looking for jobs to augment or build their income
  • Talk about how to pay off their debts, which can include settling them with their assets
  • Set up a bank account for the children
  • Identify their cost of living post-divorce
  • Start a savings account under their name

There’s no easy way to divorce, but it doesn’t have to break the bank or leave either or both people financially struggling. Even if they meet such challenges, they need not last a long time, too.

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