The Honeymoon’s Over: How Much Should You Save Before Getting a Divorce?
Divorce is a difficult and emotional process — and an expensive one. If you know your marriage isn’t working and you need to get a divorce, the first thing you’ll probably be wondering is how much it will cost.
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While predicting the exact cost of a divorce is impossible, having a financial safety net can help ease the transition and provide stability during this challenging time.
How Much Does Divorce Cost?
The cost of a divorce can vary significantly. A straightforward, uncontested divorce can be relatively inexpensive. Depending on your jurisdiction, the cost may be limited to court filing fees, ranging from a few hundred to a few thousand dollars. But, the majority of divorces involve more complex issues, and the costs can add up quickly.
The average cost of a divorce in the U.S. ranges between $15,000 and $20,000. What contributes to these higher costs? Factors like attorneys, court fees, mediation or arbitration expenses, and the need for expert evaluations, such as property appraisals or custody evaluations.
If the divorce becomes contentious and requires litigation, the costs can escalate significantly due to the time-consuming nature of court proceedings.
While the idea of saving this much money can be overwhelming, there are some steps you can take to prepare.
1. Assess Your Current Financial Situation
Before determining how much to save, evaluating your current financial situation is crucial. Take stock of your income, assets, and debts. Gather documents related to your joint accounts, investments, and shared property.
Understanding your financial standing will provide a clear picture of what you must protect and what you’re entitled to during the divorce process.
2. Get Professional Advice
Seeking advice from professionals, such as a divorce attorney and a financial advisor, can be invaluable during this time. They can guide you through the legal and financial complexities, ensuring you make informed decisions. A divorce attorney can help protect your rights and advocate for a fair settlement. At the same time, a financial advisor can assist in developing a realistic budget and financial plan for your post-divorce life.
3. Determine Your Budget
To establish an appropriate savings goal, create a post-divorce budget.
First, identify your essential expenses. This includes housing, utilities, transportation, groceries, insurance, and other necessary costs. Then, consider your future living arrangements, childcare costs, healthcare expenses, and any other financial obligations you will have once you’re single.
It’s crucial to build an emergency fund, which acts as a financial safety net, providing a cushion for unexpected expenses or income fluctuations. Calculate the total amount needed to cover these expenses for at least six months post-divorce. This will serve as your baseline for determining how much to save.
4. Understand Your State’s Laws
Laws regarding property division and spousal support vary from state to state. Familiarize yourself with the divorce laws specific to your jurisdiction to understand your rights and obligations. This knowledge will help you determine an appropriate savings goal.
5. Plan for Legal Fees
Legal representation is essential during a divorce, and attorney fees can accumulate quickly. Research local divorce attorneys and understand their fee structures to understand the costs involved. You can also consult with different attorneys to get a better estimate.
Additionally, if you anticipate needing other professionals, such as financial advisors or therapists, account for their fees in your savings goal. Saving enough to cover these fees will help you avoid additional financial stress during divorce.
6. Consider Your Individual Income
If you were financially dependent on your spouse during the marriage, assessing your individual income potential after the divorce is essential. Update your resume, acquire new skills or certifications, and research potential job opportunities. Understanding your earning potential will help you determine how much to save to bridge the gap until you secure a stable income source.
7. Open individual bank accounts
During a divorce, it’s crucial to establish your financial independence — open individual bank and credit accounts to separate your finances from your spouse’s. Having your accounts will allow you to manage your money independently and avoid potential complications during the divorce proceedings.
8. Consider Child and Spousal Support
If you have children or are eligible for spousal support, it’s important to consider these factors when determining how much to save before getting a divorce.
Child support and alimony payments can significantly impact your financial situation. While child and spousal support provide some financial relief, it’s important to have savings to cover your immediate expenses until the support payments are established and enforced.
9. Adjust Your Lifestyle
It may be necessary to save effectively by adjusting your lifestyle. Cut back on non-essential expenses, such as dining out or entertainment, and redirect those funds toward your savings goals.
Downsizing your living arrangements or selling unnecessary assets can contribute to your savings. Remember, these temporary adjustments will help you build a strong financial foundation for your post-divorce life.
Conclusion
Divorce is a challenging and life-altering event, and preparing yourself ahead of time can help you avoid going into debt or experiencing financial strain.
Building an emergency fund and making lifestyle adjustments will help you weather the financial challenges of divorce. Remember, prioritizing your financial well-being during this time will provide the stability and security needed to start anew.
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This article originally appeared on GOBankingRates.com: The Honeymoon’s Over: How Much Should You Save Before Getting a Divorce?
