Disagreements about money are often at the heart of marital strife. A recent survey of certified divorce financial analysts reveals that financial incompatibility is one of the top reasons for ending a marriage.
Ironically, money may also be behind the declining American divorce rate during inflation and economic uncertainty.
Staying Together Avoids a Lower Standard of Living
Minnesota is among the states that mandate an equitable distribution of marital property during a divorce. Also, spouses may retain their pre-marital assets. As a result, individuals who depend upon each other’s assets may be unwilling to risk a lower standard of living by losing a home, car, and income.
Staying Together Eliminates a Need for Child Care
Parenthood in a poor economy is financially challenging when one parent forfeits employment income to provide childcare, and divorce adds to the financial burden of raising children. For example, when parents caring for children return to work, they must pay for alternative childcare. Furthermore, the other parent is responsible for child support. Inflation and a poor economy that reduces job availability and salaries may discourage divorce.
Staying Together Avoids Bankruptcy
Attorneys’ fees, alimony, child support, and asset division are reasons why a divorce can be financially destructive. In addition, a poor economy and inflation can rapidly compound the financial losses from divorce, increasing the likelihood of bankruptcy and its long-term impact.
Staying Together To Avoid Health Insurance Loss
After a divorce, individuals are no longer eligible for the health insurance coverage they receive through their spouses’ employers. In addition, they may forfeit new insurance policies due to cost-prohibitive premiums. Unfortunately, lack of insurance creates financial risk if a medical emergency occurs.
When divorce during economically challenging times is your only option, strategizing ways to protect your financial future is essential.