How The Economy Has Changed Divorce
Divorcing couples can’t afford to live apart
Not that long ago when couples divorced they went on to lead totally independent financial lives but today this has changed dramatically. The housing collapse in 2008 left a long mark on the economy and also had a ripple effect on the ability of divorced couples to separate and live on a single paycheck. With the cost of rentals having increased to that of a modest mortgage there are large numbers of divorced or divorcing couples who not only can’t afford to keep their homes, they can’t afford to foot the monthly costs of renting an apartment either. And because housing markets are rebounding slowly even selling a family home isn’t giving either spouse any significant equity to start over. While the impact on couples who don’t have children is minimal, for those who do, it’s a complicated problem with very limited solutions.
The ‘new economics of divorce’, in addition to all the common challenges these parents will face, has forced them to think outside of the box of what divorce means and rather than severing economic ties, they’re transitioning into single life together rather than apart. Their very real financial limitations and their desire to protect their children are causing them to maximize their cash flow by continuing to live together after their divorce until they’re both in a stable enough financial position to separate. As unconventional as this may seem and regardless of what Family Court systems think, when couples are amicable, the benefits of this approach outweigh the negatives, especially when the economic choices many divorcing couples have aren’t really choices when they all mean significantly increasing expenses against a fixed level of income, and compromising the quality of life for children.
The increasing number of couples who are choosing mediation over hiring separate lawyers has been the biggest shift the divorce industry has ever seen. The next, using common sense and making financial decisions based on the best interests of a family over legal opinion, is occurring out of necessity and these factors, too, will redefine what divorce means for many parents and their children for years to come.