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Can your finances survive a divorce?

Newlywed, new mom and first-time home buyer, Sarah is currently playing out her exciting life in Phoenix, Arizona. She recently gave up her job in finance to stay at home with her baby girl, who between bath time and feeding time, keeps ...

The financial impact of divorce in America

A whopping 90 percent of people will marry by the age of 50, but an astounding 40 to 50 percent of those marriages in the U.S. will end in divorce, according to the American Psychological Association.

Now, what’s it really going to cost me?

The least expensive divorce: Surprisingly, going to court is not a requirement for getting divorced, and if you can agree with your soon-to-be ex-spouse on separation of assets, you’ll save thousands. One option is to use a mediator — a third-party person who helps couples reach a fair agreement. No attorneys, no divorce court, just two people trying to make the best financial decisions for both of their futures with the help of a non-biased third party. With mediation, you’ll pay the mediator, an attorney to simply look over the agreement and the costs of filing to the court. This will typically cost less than $5,000.

Did you know? Doing everything on your own can cost as little as $50 to $250 total.

The most expensive divorce: If you and your spouse cannot come to an agreement either on your own or with the help of a mediator, you’ll have to go to divorce court. Since both of you will need to hire an attorney who charges by the hour, things can get very expensive, very fast. You’ll also need to pay court fees and filing fees, not to mention miscellaneous expenses such as travel and time missed from work. Keep in mind that the longer it takes to reach an agreement, the more expensive your divorce will get.

Fun fact: Mel Gibson’s divorce from Robyn Moore Gibson was estimated at $425 million, according to Wikipedia.

Making financial sense out of divorce

Unless you’re a celebrity making millions, most likely you and your spouse will need to work together and be fair (I know, if that were possible, the divorce may not have even happened). Dragging it out only ties you longer to your ex and costs you more money. Three tips for saving money include:

  • Don’t try to get even. While you may think your spouse deserves nothing, it’s this kind of attitude that will wind up costing you tens of thousands of dollars — and your spouse will still get his fair share. If the flat screen TV is super important to your ex, give it to him, and maybe keep the couch for yourself.
  • Talk to people who have been there before. There’s no better advice then from those who have been there, done that. Talk to a trusted divorced friend or coworker on what worked, any regrets and what he or she thinks would have made the process smoother.
  • Your lawyer is not your counselor. It’s easy to get heated in the moment and start bad-mouthing your ex to your lawyer. The lawyer will listen — because the clock is ticking. Save the venting for your friends or therapist to save money.

Final tip: If you do need to meet with a lawyer, be prepared. List out all your assets and retirement accounts, have a few questions written down and be as organized as possible. This helps the process move much faster, thus eliminating additional hourly expenses.

More on finance

Pros and cons of paying off your mortgage early
How money impacts your quality of life
5 Unexpected costs you’re not prepared for

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