Divorce is the Largest Asset Destroyer

Although there are several things to avoid when building wealth, divorce is the largest asset destroyer there is.

Divorces can really add up, but there are plenty of ways to prepare for the expenses on the horizon. By preparing for these expenses, you will be able to enter the single world in a much better place.

Divorce is Incredibly Expensive

Studies have shown they result in an average wealth reduction of 77%. Aside from dividing your assets, divorce is incredibly emotional, and lawyers will capitalize on this to make a killing in litigation costs. The top 3 divorce expenses are: litigation, child care, and work & travel.

Litigation Expenses

During a divorce, each individual hires an attorney to negotiate the personal belongings each party feels they are entitled to. There is an inherent conflict of interest, where attorneys will want to bill more time getting their client as many assets as possible, and this time comes at the expense of their clients. It should be no surprise that the average litigation could cost up to $50,000.

If you do have a divorce, you will save a ton by opting for mediation instead. Mediation will cost only a few thousand dollars – even if you are not on speaking terms, this will be ideal to prevent giving all of your hard earned money to attorneys.

Child Care Expenses

If you have children, child care expenses can become incredibly expensive. Divorce expenses increase due to paying for child care, as well as commuting for your child.

For parents with sole custody – if your ex-spouse will not pay for child support, all of the child’s expenses will fall on you. Financial issues such as clothes, food, and housing all become a permanent fixture in that parent’s life.

As the single parent, you will either need to make more to pay for daycare and childcare expenses, or find alternatives through government aid programs. Neither of these are ideal.

Work and Travel Expenses

Many high paying careers involve travel, which is much more difficult to justify if you have a child at home. Being unable to travel could force you to take a demotion or lesser role, which could dramatically alter your financial stability.

Aside from travel, it will be difficult to answer the demands of your job as a single parent. Make sure to account for this during your custody negotiations.

Divorce & Assets – The Bottom Line

Although divorce is the largest asset destroyer, it doesn’t have to be. If it unfortunately happens, we recommend focusing on alternatives to a costly divorce. By avoiding the costly aspects of a divorce, you can focus on learning to love again, as well as focusing on your children.

Make sure you remain on talking terms with your spouse, and aim for mediation instead of paying for attorneys. Prepare for the care of your child, and be proactive about work and travel as a newly single parent.

Divorces are a transition into a new life – by keeping the expenses low, you will be able to set yourself free to love and live once again.