We’re getting a divorce, who pays the bills? And other money things you need to talk about.
One of the primary causes of divorce is different money management styles and arguments about spending and financial priorities.
Divorce, even the most amicable, takes time. Many states have waiting periods and courts make their own calendars regardless of your desired agenda. There are going to be financial decisions that need to be made in the interim, you and your spouse will need to talk about how your joint finances will be handled before your divorce is official.
Who has paid the bills in the past?
If you’re remaining in the same home until the divorce is final, you may leave bill paying with the person who has done it in the past. Or, you may look at this as an opportunity for the non-CFO spouse to gain experience in managing household expenses especially if you’re the one intending to stay in the marital home and haven’t been paying the bills.
If one of you moves out prior to the divorce, you still have shared decisions to make regarding finances. Until you’re divorced (unless you put in place a legal separation that addresses finances prior to divorce), your marital funds are joint.
Some of the things to discuss:
- What is a reasonable amount to pay in housing for the non-resident spouse?
- Who will pay the bills for the marital home?
- What level of transparency do you expect in expenses for the spouse who’s moved out?
- Some couples agree to a specified spending level so they don’t have to check-in for every small expenditure, but they aren’t surprised by large ones.
It’s reasonable that there will be additional expenses setting up two households from what used to be one. It’s also reasonable that both of you have a say in what that looks like prior to divorce.
Picture this; one spouse moves into a trendy loft apartment that costs twice the amount of the monthly mortgage payment and then furnishes it all with brand new contemporary furniture, new pots, and pans, new dishes and glassware, the works!
The spouse remaining in the marital home has the ten-year-old sofa stained with red wine and that spot where a peanut butter and jelly sandwich was smashed into the upholstery. The dishes are cracked from years of use and the furnace is going to need replacing.
Can you see how this might make levelheaded discussions about how to settle distribution of your combined assets difficult? Does that new furniture, in fact, belong in part to the spouse who stayed in the house? If it was purchased with money that is considered marital, yes.
A common mistake the spouse buying new goods makes is thinking that the value of the $2,000 bedroom set being delivered to their new apartment is the same as the $2,000 bedroom suite they purchased together 16 years ago. It’s not. The shared possessions are only worth what you can sell them for on Facebook marketplace or at a garage sale. And even with that a lot of effort can go into managing the sale.
And then there are other expenses that can be harder to talk about. Here are just some places a divorcing couple may not be on the same page financially…
- If a spouse isn’t used to cooking and dines out or Door Dashes almost every meal, that can add up to a significant amount quickly. If the other is slaving in the kitchen and coupon clipping to save cash, this can create resentment.
- What if one spouse has subscribed to a dating service? What if they’re using marital funds to pay for drinks when they swipe right?
- How about vacations? If one parent takes the kids camping and packs picnics to save money and the other splurges on a five-star resort and has a no limit to what you can order decree, is this equitable? (Can decide what dessert? Order them all! I’ve seen it happen.)
Sorting all of this out after the fact, especially if there is going to be a claim of dissipation of marital funds, can take a very long time and cost a very large amount of money. It’s hard to have the discussions before, but if you can come to an interim agreement with your going to be ex you will not only save money, but you might also save your future relationship.
Take Control of Your Future
When you consider divorce, or if you know someone who is contemplating divorce, one of the biggest realities for those in the divorce process is the financial settlement and financial analysis post-divorce. Get the assistance of Brenda Bridges, a Mediator, Certified Divorce Financial Analyst® (CDFA®), RICP® Retirement Income Certified Professional, and Certified Divorce Coach.
Brenda provides step-by-step guidance on matters related to divorce. With a wide range of experience and expertise related to divorce issues, Brenda will simplify the process and provide much-needed clarity in areas such as long-term tax consequences, asset, and debt analysis, dividing pension plans, continued health care coverage, stock option elections, protecting support with life insurance, and much more.
Divorce coaching and educational services provided through Bridging Divorce Solutions, LLC. Bridging Divorce Solutions, LLC is not affiliated with Cambridge. Examples are hypothetical and for illustrative purposes only.