How Debt and Money Problems Often Lead to Divorce


Do you regularly fight with your spouse or significant other about money? If so, you aren’t alone. Of all the stressors that can often pop up in a relationship, money is usually the worst. In fact, a survey conducted by SunTrust bank found that money problems were the number one cause of friction within marriage. Debt is a major factor that leads to divorce, including student debt.

A lot of it has to do with how much money impacts our everyday lives. When there are money problems, it makes life more difficult, no matter who you are. The strain can be too much to bear, even if you’re single. Throw in a marriage and kids and you will start to see the stress levels soar tremendously.

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Spenders vs. Savers

The tension seen in relationships over financial issues actually comes from each partner having a different view of money. It’s especially true when a couple is new to the whole marriage dynamic. Most of us, unless we marry super young, are used to living more freely and not having to pay super close attention to the budget.

Once the ring goes on that finger, suddenly you’re budgeting for two, then three or more people if you have kids. That’s added strain and responsibility without addressing the fact that you need to budget your money better. Once you buy the house and upgrade the car, that’s more payments and higher debt.

The Debt Problem

80% of Americans are currently in debt. That’s quite the staggering number! What’s even worse is, 1 in 5 people in a relationship claim to hide money from their significant other, or spent at least $500 without telling them. This might explain why more than half of all marriages in the U.S. end in divorce and why money is the leading cause.

Spending is usually the culprit.

The Cost of Divorce

The problem with couples who divorce over money issues is that the act of terminating their marriage is often quite costly and can set them back for a long time to come. There are many benefits to marriage financially and the best option is to always work it out and learn to be honest with each other about money.

Here are some of the costs of divorce:

-You pay less in taxes when you’re married. That means when you’re back to being single, you end up giving away more of your income than if you stayed together.

-Real estate expenses. Rather than two people with two incomes living in a home (which is often manageable), suddenly you have to do it all on your own. It doesn’t matter if you keep the house or are the one who moves out. You now have to pay for living expenses on your own.

-Capital gains. Do you and your partner have investments? You can’t keep them, often slicing into your gains with a capital gains tax.

-Divorce is expensive. It’s even more expensive if the divorce is contested. It can cost as little as a few hundred bucks, but that’s only if things go perfectly. The average cost of a contested divorce in the U.S. is between $15,000 and $30,000 according to Legal Zoom. Most divorce lawyers charge around $75/hour, which can add up quick.

-Self-care. Divorce is a heavily emotional time for families, especially if it involves kids. They can be impacted for the rest of their lives by this, often resulting in counseling to help deal with what they might consider a trauma.

-Insurance. Usually, you can put your whole family on your insurance and pay a single price, but after a divorce, you’re responsible for paying it on your own.

This goes to show that if you and your spouse fight a lot about money, or you plan on getting married soon, you need to have a serious talk about money. Go over ways to save and express your desire to be open and honest about all expenditures. Work out the budget together each month to ensure you’re both on the same page.

Last modified: December 12, 2018