The Cost Of Separation: It May Be More Than You Think
Let’s face it: Marital discord is agony. You wouldn’t separate if you didn’t have to. For most couples, the decision to separate means they’ve come to the end of their rope emotionally, intellectually, and spiritually. What couples often don’t realize, though, is the strain separation will put on them financially.
Let’s start with some basics. The median income for a family of four in Pennsylvania is around $75,000, so the couple nets around $5,000 per month. We’ll assume that one spouse nets $3,200 per month and the other nets $1,800. From the combined incomes, the couple pays one mortgage, plus monthly bills for gas, electric, phones, cable, internet, garbage, water and sewage, etc. The family of four shares food and sundries and therefore purchases many of these items in bulk at a discounted price. For example, a 12-pack of toilet paper costs less per roll than a 4-pack of the same brand. (If the parties’ incomes are higher, or lower, the discussion still holds true.)
Now comes the separation. One spouse moves out of the marital home and, unless he or she is fortunate enough to have a friend or relative take them in, that spouse will have to rent or purchase a new residence. Incomes have not changed for either spouse but, with the exact same monthly net income, those incomes will have to stretch to cover two mortgage/rent payments, and two gas, electric, phone, etc. bills. There’s also another significant new cost that a separating couple often faces: legal and other professional fees. Many people begin the separation/divorce process believing that they can manage it by themselves. But if there’s a marital residence, a retirement account, or any other significant asset or debt, chances are that at least one spouse will consult a lawyer, even if the divorce is ‘amicable.’
Where does the money come from to pay for the new, additional expenses? It could come from savings and other assets. You can raid them for a while, but then there will ultimately be fewer marital assets to divide. If you don’t discuss this with your spouse first, and reach an accord about what portion of the assets will be liquidated, you could find yourself in hot water later, with one spouse accusing the other of dissipating the martial assets.
The money could come from scaling back other, more discretionary expenses, like going out to eat or soccer for the kids. But most people are used to, and expect to continue the lifestyles they have lead, with the attendant spending levels, prior to the separation. It’s difficult to scale back expenses unless you know in advance that this will be expected, and discuss and reach agreement with your spouse about where EACH of you can cut back.
Spousal and child support almost always come in to play at this point. In general, Pennsylvania law says that both parents must support their children until the children turn 18 or graduate from high school, whichever occurs later. The parent living with the children is deemed to be making their support payment directly to the children, so it’s the noncustodial parent who has to pay child support. Spousal support is paid by the higher-income spouse to the lower-income spouse.
In our hypothetical above, this means that the parent netting $3,200 per month annually would have to pay spousal support to the parent netting $1,800 per month. If the lower-earning parent also has primary custody of the children, that spouse would receive combined spousal and child support of around $940 per month. If the parent netting $3,200 per month had primary custody of the children, the lower-earning spouse’s child support obligation could offset the higher-earning spouse’s spousal support obligation to such an extent that only around $100 per month in spousal support would be owed.
No one is ever happy with the amount of support they have to pay, or receive. You can see why. The income for the family is exactly the same as it was when they were all living together. But with several new, large expenses, they are splitting up the money and there’s just not enough to go around.
Here’s where the blame game can kick in. The person paying support believes the other spouse is overspending, as in “I’m giving him/her every penny I have and living in a rat hole, while he/she goes out to dinner with the kids and buys new clothes every week.” The person receiving support often believes the other spouse is not picking up his/her share of the day-to-day living expenses, as in, “Our son’s T-ball sign-up cost $50 this month, and our daughter’s ballet lessons are $40 EACH month, and all I get is this support payment and it doesn’t even cover the mortgage.”
Another problem often appears: the refusal of overtime or raises. This generally occurs when one spouse believes that either (a) the other spouse is taking unfair advantage and soaking him/her on support or spending frivolously, or (b) that if he/she accepts a raise or overtime, every single extra dollar earned will just end up in the hands of the other spouse.
Refusing raises/overtime is like cutting off your nose to spite your face. Support awards are not dollar for dollar. In our example above, if the higher-earning spouse’s earnings increases from $3200 to $3700 net per month, the combined child and spousal award increases only by around $210 per month, leaving the higher earner an additional $290 per month in his/her pocket.
Separating couples may not be able to totally solve the separation expense problem. But they can make it more manageable. The simplest, though often most difficult thing they can do, is TALK TO EACH OTHER IN A REALISTIC WAY ABOUT WHAT IT WILL COST TO MAINTAIN TWO SEPARATE HOUSEHOLDS. These discussions should begin BEFORE the separation. If couples can talk it out, and prepare at least semi-accurate budgets, there will be far fewer rude surprises once the separation occurs. It may also be cost-effective to engage the services of a professional, whether it’s a lawyer, financial planner, credit counselor, or accountant, to present some neutral, objective analysis and advice.
Families may have to negotiate cost-cutting measures, both large and small. It could mean fewer haircuts, fewer extracurricular activities, or a less-expensive cellphone plan (good luck with that if you have teenagers). Whatever it takes to make it work, though, will be a lot easier to plan and implement, if both spouses talk to each other and face it together. Even if this is the last task you face together, it’s worth it: emotionally, intellectually and financially.
“The Cost of Separation” as it appeared in the 2008 Divorce Guide, published by 5th 3rd Bank
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*Susan practices law primarily in the areas of domestic relations and consumer debt. Her law office is designated as a debt relief agency that helps people file for relief under the Bankruptcy Code.