A couple struggling with finances will often also struggle in their marriage. Without enough money to go around it's easy to disagree on which financial burdens take priority. It is, therefore, not surprising that numerous studies point to financial arguments as a leading predictor of divorce.
In the current economic climate, many couples have experienced financial hardship. Although the unemployment rate has recently improved, no one views the current situation as an economic boom period. According to a recent article by CNN Money, job growth remained slow in early 2014, retail sales slowed and manufacturers continued to struggle. Still, compared with several years ago, more people are working and financial markets have recovered.
While the economy has improved recently, there has been a spike in the divorce rate. This may seem counter-intuitive, since financial struggles often contribute to rocky marriages. One explanation is that couples now in an unhappy marriage no longer have to stay together simply for financial reasons. Maintaining more than one household can be very expensive. However, if one previously unemployed spouse can find a job, splitting the household may be an option. Also, a home that was "underwater" may now be able to be sold at a reasonable price. Furthering an education or taking out a small business loan may now be possible, whereas for several years following the Great Recession people were reluctant to take on debt.
From data collected by University of Maryland sociologist Philip N. Cohen, approximately 150,000 fewer divorces occurred between 2009 and 2011 than expected. He cautioned, however, that the research on the exact correlation between financial difficulty and divorce is still unclear and that more research must be conducted before drawing firm conclusions.
Options for divorcing couples
Those considering divorce need to take into account numerous financial considerations, regardless of the couple's current finances. A division of marital property is the starting point for determining which assets and debts will be taken into account when deciding who gets what property.
Spousal support, or alimony, is a factor in many divorces. For example, one spouse may have given up work outside the home to be a stay-at-home parent or homemaker. Alimony can help financially during the transition period back to the work force or provide for job training. Child support payments are a factor in divorce for couples with minor children. Because child support payments are for the benefit of the children, not the custodial parent, child support payments are not considered income for the receiving parent, and the paying parent cannot claim a tax deduction for child support payments unless it is provided for in the divorce settlement.
An attorney can help
In an attempt to save money, a couple may decide to forego representation by an attorney. But with so much at stake, can it be worth the risk of a financial backfire to go it alone in a divorce proceeding? Anyone considering divorce would be wise to contact an experienced family law attorney to determine legal and financial options and be guided through the process.