Every August, there’s a bi-annual surge in new divorce filings, probably because couples want to make a break before the holiday season gets started.
However, divorce is a bit harder right now than it has been in previous years – and you can thank the turbulent economic times for that. Here are several ways that economic factors can make your divorce more difficult right now:
Your investments might not be doing well
It can be painful to split your 401K, savings accounts and investments in a divorce, but that pain can be compounded if your investment portfolio has recently devalued due to fluctuations in the stock market. It may be wiser to wait until the market stabilizes to split things up, but that could mean dragging out your divorce indefinitely.
You may have trouble selling or refinancing the house
Divorcing couples generally take a couple of different routes with the family home. They may decide to sell it and split the proceeds, but the housing market has been cooling and buyers are increasingly hesitant to bite right now because the interest rates and property values both seem poised for a fall.
Alternatively, one-half of a couple may want to keep the family home – but that usually means refinancing the home into their name. Again, economic issues are making banks more hesitant to offer mortgage loans and the interest rates are high, so it could prove hard for a spouse to refinance on one income.
You may struggle with inflation as you start over
Finally, inflation can make it even more difficult to live on one income, especially once you factor in the costs of putting down new security deposits on an apartment and utilities, paying for your health insurance if you were previously on your spouse’s and just keeping up with food prices.
Does this necessarily mean that you should postpone your divorce? Not necessarily. It’s just important to make sure that you do some careful financial planning as you move forward.