Money and divorce are related in a variety of ways. Financial issues, including lack of communication about the meaning and use of money and money values, are a common cause of divorce. Below are four common financial effects of divorce.
1. The financial cost of each spouse having to hire legal counsel to represent them can cost thousands, and sometimes tens of thousands, of dollars.
2. One or both spouses may experience a decrease in their standard of living as they begin to live in two separate households and each pay rent, utilities, etc. that they formerly paid for together. In addition, extra expenses may need to be paid for child care, lawn care, and other services provided by a former spouse.
3. Divorce is a major "shock" to wealth accumulation efforts as savings for future financial goals may need to be curtailed in order to make ends meet on a reduced income.
4. Some people lose their health insurance as a result of divorce and must pay premiums out of pocket for benefits that were previously provided by an ex-spouse's employer.
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