Financial worries and disagreements between coparents are one of the most common stressors discussed by divorcing or single parents. Marriages and divorce impacts financial investments, such that divorce can hurt them (e.g., see Christiansen et al., 2015). Further, many individuals have a lot of fears surrounding finances, so it can be the worst enemy when negotiating. Individuals may fear financial hardships, the idea of starting over again, a loss of property, or prominence in a community. This can be especially challenging if one has been financially dependent on his/her ex-partner. Even in the most amicable coparenting relationships, parents often argue about assets, child support, extracurricular activities, or other issues related to the financial aspect of divorce; a lot of this is related to fear or emotions surrounding the divorce. So, it's important to eliminate fears by planning ahead.
Unless they are wealthy, most individuals do not financially benefit from the divorce. And, there's not a one-size fits all answer to financial agreements in a divorce or separation, but there are several things you'll want to consider and or document.
1) MAKE SURE EVERYTHING IS CLEAR IN THE MARITAL SETTLEMENT AGREEMENT AND PARENTING PLAN
Make a list of all property acquired during the marriage (rental properties, houses, boats)
Retirement accounts (and pay increases or changes with retirement)
Health insurance (who will pay for insurance, co-pays, etc...)
Taxes (e.g., who will claim what child, what year, for how long)
Expenses related to extracurriculars (e.g., traveling sports, dance, music lessons)
Cost of children's school lunches or other regular school expenses (e.g., registration, books, supplies)
Care for mental health or therapy
College and other special educational expenses (e.g., private school and legal custody)
Credit cards in your name or your ex's
What both coparents have spent since separation, joint checking account balances
Gifts/inheritances
2) KEEP EMOTIONS OUT OF IT
In a divorce, individuals are often overwhelmed with emotions in addition to fears, including sadness or anger. It's important to avoid bringing negative patterns of a marriage into negotiating room and to really think about how you will respond to threats, a co-parent's anger, or conflict. Mediators are a great resource for divorcing parents, especially those in high conflict situations. Mediators are often significantly cheaper than attorneys, and they can help parents work through conflicts and negotiate finances before one pays an attorney three times as much.
3) KNOW YOUR RIGHTS
Attorneys and mediators know the laws, as well as how judges typically respond in a given county. In most counties, men and women have equal rights with respect to finances; yet, this will likely vary and depends on a variety of circumstances, including the length of marriage, issues with the law, or involvement in child welfare.
4) FIND/CHOOSE THE HOUSING OPTION THAT MAKES THE MOST FINANCIAL SENSE FOR YOU
If you or your partner owned a home together, you will likely divide the equity of the home in negotiations. Some individuals want to keep the home for emotional reasons though considering your own financial situations is important. Often, it's not just whether or not one can make the payment that should be factored into decisions, rather individuals also want to think about homeowners fees, taxes, indoor and outdoor maintenance, and other things it would take to maintain or increase the home value. If a parent does not believe he or she will stay there longer term and or they cannot afford to buy, it may be in his/her best interests to rent.
5) PLAN YOUR POST-DIVORCE BUDGET BEFORE YOU SIGN DIVORCE OR PARENTING AGREEMENTS
Planning your budget in advance of signing divorce or parenting agreement paperwork is critical. It's important to think about details and to not underestimate current or long-term expenses. Expenses often include housing, groceries, phone, electricity or gas, water, sewer, trash, cable television, maintenance/repairs, child care, tuition, pets, transportation, personal care, insurance, loans, taxes, gifts, and entertainment among a few things.
Resources for budgeting and your financial health
Financial experts with books, resources and websites:
US News - 10 Simple and Free Budgeting Tools
Videos:
How to start post divorce - Dave Ramsey: