Will you be able to keep up your standard of living?
The first few years following a divorce can be the toughest financially as you adjust to a new lifestyle and make adjustments for increased costs.
One report estimates that an individual would need 30 percent more in income after a divorce to continue the same standard of living as when he or she was married.
Assets Are Not Simply Split in Half
You shouldn't think that divorce will mean each spouse will get half of what you both own together.
The equation is a lot more complicated than simply splitting the financial assets and liabilities in half so that each spouse can get his or her half. The reality is that many things come into play that could affect your finances after a divorce. What comes into play depends a lot on how much each spouse earns or has the potential to earn, among other things.
The statistics about the potential financial ramifications of divorce are sobering. They don’t paint a pretty picture, but advance planning in consultation with your divorce attorney can help you be better prepared.
Things to consider:
Here are some things that could affect your financial picture after a divorce:
- New rental or mortgage payment.
- How much is left on your mortgage if you keep your former home.
- How much your home is worth if you plan on selling it.
- Upkeep costs of maintaining property you formerly owned jointly.
- New alimony or child support payments that may not cover all expenses.
- Cost of increased childcare since you won’t be able to rely on your spouse to help care for your children.
- Transportation. Do you have a car or do you need to buy one?
- Do you have enough furnishings or will you need to buy new ones?
- Do you have health insurance or will you need to get a job that provides one?
- Can you get a job that provides health insurance?
- Do you have a good credit history? If not, this could affect everything from the kind of mortgage or rental you will be able to get to what kind of job you get.
- Have you kept up with your job skills or will you need to pay for education/training costs to update your skills in order to get a job?
The above is by no means a complete list. Unfortunately, one of the harshest realities following a divorce is a radically different financial situation. Are you ready for that?
Photo credit: Dan Esparza