Money Matters: 3 Tips for Addressing Financial Problems During Divorce
Money can be a major cause of stress in a marriage, so it should come as little surprise that solving money problems can be even more complicated in divorce.
Divorce usually comes at a time of economic strain in a marriage and, of course, adds fuel to the fire by immediately adding additional expenses; the cost of a second home, legal fees and the cost of other divorce professionals. The fear of scarce resources can cause people to “fight for a bigger piece of the pie”. However, it soon becomes clear that, if both sides fight hard for a bigger slice of the pie, the legal fees and other expenses of maintaining the fight will cause the pie to shrink and the fear of having too little to rise.
So, how can couples rise above the dilemma of draining resources from a rapidly shrinking pie? Here are a few quick tips:
- Recognize that the most expensive part of a divorce is conflict. The desire to “lawyer up” and to focus on “winning” generally just creates economic loss for both parties. Most importantly, there are ways to protect your interests that work better, and put more money in your pocket, than gearing up for a fight.
- Look for true “win-win” solutions that can actually make the pie bigger. Believe it or not, there are ways to think creatively in a divorce that will actually help both you and your spouse get more resources; including ways to save on taxes and transaction costs and ways to build in true incentives for both of you to earn more income and/or spend less money.
- Improve your money sense. In the end, you will be left with your share of the assets, income and liabilities of the marriage. Your financial future will depend on your ability to manage your share, perhaps more than any other factor. Divorce provides an opportunity to improve your money skills, including your spending habits and earning power.
Collaborative Divorce, because it focuses on reducing conflict and increasing skills, and because it gives you the assistance of a neutral financial expert, provides many opportunities to improve in each of these areas. To learn more about the Collaborative options, and other ways to help address divorce financial issues go to www.collaborativelaw.org
More Collaborative Law Posts