Q: How do you make a small fortune from your marriage?
A: Start with a large fortune, then get divorced.
An old joke that gets recycled for all kinds of scenarios, but still rings true. 🙂
Nobody tells you how financially disruptive a divorce can be AFTER the divorce is done – sure, you assume the main event will be expensive and that it’ll drain your accounts. And if you’re the lower earner in the marriage / married to a higher earner – you may even be thinking about a big payday in the form of a nice fat settlement check, juicy monthly spousal support payments, etc. Those are the big, dramatic, sexy dollar amounts that get all the attention.
But what you may NOT be considering are the lesser-but-longer-term impacts that continue long after the big checks are written – they’re smaller expenses, but they really add up:
- Housing costs – you’re saving money by sharing / splitting the costs of running 1 household. Guess what? Now there are two households. You probably won’t be spending double (plan on at least one of you downsizing, probably both of you) but you will *definitely* be spending more to operate two separate living environments.
- Household “accessory” costs – Beyond the obvious bills like rent/mortgage, there’s internet bills, Netflix subscriptions, utilities, maintenance, etc.
- Groceries – similar to the above – your food bill used to benefit from shared economies of scale. You can save money buying larger quantities of food as a couple, but try that as a single and you just end up tossing out expired food because you’re not eating it before it goes bad. Add in kids and/or shared custody arrangements, and this math gets exponentially more true – because now BOTH parents are trying to stock full pantries, without running into expiration and waste since the kids aren’t around 100% of the time, and the food “burn rate” is different now.
- Auto + Insurance costs – Before you divorced, maybe you had one family car because that’s all you needed. Or maybe you had 2 cars: a small commuter for the spouse that worked, and a larger “family truckster” size car for the stay-at-home parent + for family trips together. You were able to “ride share” and make right-size car purchases for specific needs. But now, you’re going to need separate “one car to do it all” or “multiple car” solutions for each household. So now BOTH households need at least one car that solves for everything – and that typically means saying goodbye to the smaller, less expensive commuter car – and hello to a larger vehicle. Now both of you are owning and operating family trucksters.
The list goes on – and your small fortune continues to get smaller.
What other “budget surprises” have you encountered in the wake of your divorce? What shared living expense savings did you take for granted, and now feel the pain from?