Divorce costs a lot more than most people think. That cost is not just the solely related cost of the divorce (chiefly the expense of lawyers), but also fully allocated (and often extreme) lifestyle changes that happen when the couple end their marriage. At the same time that expenses go up, incomes often dip in the wake of the breakup. According to a 2012 General Accountability Office report, after a divorce the woman’s household income fell 41 percent on average and the man’s fell more than 20 percent.
“People say, ‘I have to get out of this marriage,’ but after digging into the numbers they’re shocked and wonder if they can afford it,” says Tracy Stewart, a certified public accountant who specializes in divorce. Even a simple, amicable divorce “is unlikely to cost less than $5,000 per person.” Double that “if child custody is a factor,” and if a business is involved, expect to shell out somewhere in the ballpark of $20,000.
But these are the divorce solely related costs to the divorce. Now come the fully allocated costs, the total cost – the cost of moving and maintaining a second home for one of the former partners.
Moving includes first and last month’s rent, moving expenses, time off of work to move, utility hookup fees, and rental storage, but the cost of moving is negligible in comparison to the total cost over time. ”
By living in the same house, your expenses are reduced. Utilities and mortgage is a shared benefit of the marital household. This assists in elevating the standard of living and increasing savings for emergencies, vacations, investments, and retirement. When living alone (post separation or divorce), the living expenses increase by virtue of its division by 1. That is, only you are using the items paid for. This is easily recognized when comparing a family of four sharing the same home. The cost of basic necessities in a case like this is decreased by a factor of four.”
In addition to the second home for one former spouse, divorce adds expenses that cost more outside of marriage, such as child support and additional medical insurance.
The expenses of running two households is the ticket to the poorhouse. For the affluent, the cost may not be a big issue. For the very poor, this too may not apply. But for middle income Americans the fully allocated cost of a divorce demands consideration before one partner walks out the door.