Divorce and Your Finances

The following is a post by MPFJ staff writer, Derek Sall. Derek is the owner of the blog, LifeAndMyFinances.com, where he teaches people how to get out of debt, save money, and become wealthy.

Divorce is running rampant throughout the U.S. and in other parts of the world as well. It no doubt affects us emotionally, and we struggle with the fact that our young love is now an adult hatred. But, divorce can also have a terrible impact on our finances.

I should know, since my wife divorced me two years ago.

The Hurt, the Pain, and the Debt

There is no such thing as a clean and neat break. Divorce is hardly ever mutual and it is hurtful for both the divorcer and the divorcee. There is often a lasting pain and scarring from these terrible relationships, but the scars do begin to heal after a while.

The pain that hardly anyone talks about after a divorce is the financial difficulty. Without a doubt, there is typically one person that benefits greatly from the divorce, and one person that suffers (and may even lead them into bankruptcy). I, unfortunately, did not benefit emotionally or financially from my divorce. I didn’t want to separate, and I certainly didn’t want to owe my ex money after the split. But, that wasn’t for me to decide.

My Divorce Experience

When my ex-wife said the words, “I just want out – I want a divorce,” I knew she meant it. There was no going back. After meeting with the mediation agency, I learned that she expected to receive half of our net worth. Since she was the spender and had nothing to do with the money we had saved up (I practically had to hide it in order to keep anything in our account) this really burned me up inside. But, if I would have tried to fight it, I would have spent just as much money paying a lawyer to fight on my behalf, so the even split was agreed on.

At the time, our estate basically comprised of two paid-for vehicles and some equity in the house, which gave us a net worth of approximately $60,000. Not too shabby for a 27 year old and a 24 year old. Since she was going to keep the $10,000 VW Beetle, this meant that I still owed her $20,000, and she wanted it in six months. Yikes!

I didn’t necessarily have to agree to her short time-frame, but I honestly didn’t want to think about this divorce any longer than I had to. The sooner I could get this payment over with the better.

To earn the necessary funds, I did nothing fun, cut back on my expenses, and did everything possible to earn more money. I flipped two cars, wrote hundreds of articles, worked hard at my job, and accepted many advertisements on my website to earn the short-term dollars. To make a long story short, I made it. I scrounged up $20,000 in six short months and was completely free from my venomous ex.

Divorce and the Financial Impact

If you are currently going through a divorce, I am terrible sorry. It is probably one of the worst things I have ever encountered and it still messes with my emotional decisions today. If your finances are negatively impacted, then I am doubly sorry. Not only do you have to suffer through the emotional heartache of losing someone you once loved so dearly, but you also have to live like hermit to have any chance of paying your ex half of your estate. Or, worse yet, you might have to sell your home in order to divide the assets evenly. Your world will be flipped upside-down in every way imaginable, and it will seem like hell for quite some time. But, there is a light at the end of the tunnel.

After I got through paying that $20,000, I realized just how quickly I could earn a substantial amount of money. And, I now knew of many ways that I could earn even more! This allowed me to boldly set a goal for myself in 2014. I wanted to pay off my mortgage completely within the year – all $54,500 of it. So far, I have paid off about $28,000 and I’m actually still on pace to pay off the remaining balance by December 31^st.

Once the mortgage is paid off, I have a goal to buy a rental property with cash in 2015. From there, financial success is certain to come my way!

If you are currently struggling through the financial sorrows that come with divorce, pick your head up and try to look at the bright side. It may leave you happier and more wealthy than ever before!

How about you all? Have you gone through or are you currently going through a divorce? What sort of financial impact did it have on you?

Share your experiences by commenting below! 

***Photo courtesy of http://www.flickr.com/photos/superstrikertwo/4079339001/in/