Divorce During Recession: A Double-Edged Sword

Divorce During Recession: A Double-Edged Sword

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Can you go through with the decision to divorce during a recession? Is the distant memory of “for richer or poorer” ringing more true for you and your partner today? What effect will these poor economic times have on your decision? Should you decide with your “head” or your “heart”; it’s a double-edged sword.

Today, many couples are feeling trapped as the economy slowly recovers. Couples are saying NO to divorce as financial stability has taken a front seat. Couples are staying together because their family income has been cut in half or completely eliminated. With the current economy, house prices are falling. Often, families are forced to stay together in the same home even after the divorce decision has been made. They wait months or years for their house to sell. In addition to equity in their house, investment and retirement portfolios have decreased.

What should couples do?

If couples place emotional stability above financial security, the decision to proceed with divorce is “YES”. However, it is women who favor happiness, while men focus on the financial implications. These emotional decisions often mean starting new jobs or even second jobs to take care of the financial difficulties that can come with divorce.

When one person moves out there may still be mortgage payments, and now there is new rent to pay. If the couple cannot sell their house, keeping it at a lesser valuation may, over time and as prices rise, be a smart financial decision. If portfolios are divided during a recession based on dollar value rather than units and shares, one partner may end up with the share of the pie that rebounds more slowly; if you are the fortunate one, much more quickly.

Money matters during a recession are often also the overriding theme in a marriage. During turbulent times in a relationship, the decision to end a marriage is a double-edged sword. Couples may not want to end a marriage during a recession. But then again, can they afford not to?