What is one of the most common and biggest struggles for divorcing couples? After infidelity, the most popular answer is: the struggle over money and finances. Financial issues are touted as the second leading cause for divorce. Half of all married couples with over $50,000 in debt claim that money is the reason for their arguments. Over 66% of all marriages begin with the parties being in debt. Money issues have been, and likely will continue to be, a source of marital discord – in good times and bad.
Just how and why does money impact a married couple? Couples cite various disagreements over money as the source of their marital discord. Decisions over renting or buying a home, buying a new car, relocating, sending the children to private or public school, what extracurriculars should the children have, using credit cards, and other such topics can generally pose a difficult decision for many people.
However, even with money issues being a common “sore subject” for many couples, the interesting trend is that during times of economic recession, divorce rates tend to drop during tough economic periods. People decide to stay together and stay married. Experts believe that financial problems force couples to stay together during tough economic times simply because the parties start thinking that they cannot afford to separate. Parties realize that they cannot live under two separate roofs. Two house payments and two sets of bills for utilities, HOA fees, insurance, etc. can become overwhelming for a couple. Each partner will likely spend $10,000 in legal fees; the costs of divorce can become overwhelming.
Often, we hear from newly separated parties about the unplanned expenses associated with separation and divorce. Parties will complain about the cost of moving, buying new furniture, purchasing all the items needed to set-up a household, etc. Parties, especially those who are parents, will complain about the increased driving they are forced into for custody exchanges or other custodial responsibilities. These might seem like small expenses, but they can quickly combine to add even more economic pressure to a tense situation.
The value of assets during a recession typically decreases as well. Home values dip, as do stock funds and retirement accounts. Parties may be forced into realizing that their nest egg or savings is just not as secure as they once believed.
For many cases however, there may be no option but to proceed with the divorce even during a recession. Some fortunately will have the resources to move out and onward and sometimes the financial loss is not nearly as important as the freedom gained and, in some cases such as when domestic violence is involved, the safety that comes with it. Parties may also entertain the idea of another job or side hustle. More work will likely affect a parent’s time with the children and spouse.
The financial implications of a recession don’t just touch the spouses, but children are affected as well. In difficult economic times, children might be forced out of private schools and into public schools. Extracurricular activities might need to be limited or reduced to none. Vacations may need to be redesigned or turned into a staycation. Older children might realize their need to seek employment after school and/or on weekends. They may also need to reconsider their private college or out of state college plans. Parents may also be forced to rethink their obligations to help pay for college for their older children.
For the parent and/or spouse who is making spousal support or child support payments, tough economic times may help them acquire a lower support payment. But, the receiving spouse can argue and typically obtain language in a separation agreement or court order that support payments can be reviewed in a few years and when there is a change in circumstances.
Economic data shows that single parent households tend to be lower income and suffer from a higher poverty rate. These trends tend to have a negative affect on children in terms of their grades in school and chances of interaction with the criminal justice system.
It costs money to get divorced. There are court costs and legal fees. Cash strapped parties may decide to “stick it out” until the economy improves. Those who have the resources may actually benefit from moving out sooner rather than waiting for financial stability within the economy, as they can begin their new life sooner. Parties who are working in an unstable work environment may have even more reason to stay married. No matter your situation, tough economic times may prove to be the common ground to help a family find what is needed to stay together or to have the courage to move forward despite the odds.