Divorce Economics - Two Households, Same Income

One of the first tasks you will have to accomplish after your divorce case is filed is determining temporary orders that outline how bills will be paid on a day-to-day basis. In the future, I will write a much more detailed blog entry about all aspects of temporary orders, but I wanted to touch on an important topic today:

Economics.

When two people have to part ways and maintain separate households, something very simple yet very profound occurs. Expenses double. The new household needs to be furnished, and then afterwards, each household generates its own set of expenses. These added expenses are compounded by the fact that each side is also paying legal fees, but the amount of income generally does not grow in proportion.

The predictable result of this development is that there is less money to go around. One of the things I often have to discuss with clients is how the Court handles the finances on a temporary basis. Clients immediately want the Court to order what they "deserve" or repeat language they have heard on TV about the "lifestyle to which they have become accustomed." The hard reality is that in Snohomish County Courtrooms, parties rarely have enough money to maintain their previous lifestyle in light the new expenses. (That consideration, while present in the law, is generally saved for cases where there is the resources to maintain lifestyles. Most of us mere mortals just pay bills instead of financing a "lifestyle.")

With that knowledge in mind, the Courts focus on the parties each having enough money to survive and meet basic needs. Later, at mediation or trial, there will certainly be a far greater financial reckoning where the scales are (hopefully) balanced through things like dividing major assets, selling homes, dividing pensions, and the like, but that does not happen in the infancy of the case.

One of the best things you can do to set yourself up for success as you navigate a divorce is to accept that for the next 12-18 months, you will have to operate financially from a "need-based" mentality as opposed to a "want-based" mentality. I fully realize this is hard, because of how stressful divorces are. For many people, their primary emotional regulation and stress relief tools involve spending money. I realize that asking someone to adopt this more "survival-oriented" mentality is hard, but it is absolutely necessary.

I often sit down with clients and carefully go through their post-separation budgets to get a real sense of how much money they will need monthly to make ends meet while the divorce is pending. This step is absolutely critical. I would advise you to do this on your own, and then get another (non-attorney) set of eyes on it before you sit down and do this with your lawyer. If you have not handled your own finances in some time, this might be a rude awakening. Put your head down and get through it. The sooner you square your mind and heart with financial realities, the sooner you will be able to succeed in this process. There might have to be some education in maintaining your own money, and that is totally OK. Luckily there are some wonderful resources out there, and many attorneys can point you towards ones to get you started.

Finally, go over your post-separation budget with your attorney. It is absolutely critical that your attorney understand your economic reality. I can't tell you how often I've seen attorneys make child support and maintenance arguments based on what is "typical" or "standard," as opposed to from having a very clear understanding of what a client financially needs.

After temporary financial orders are in place, pay attention to your budget while the case is pending. Despite our best efforts, an initial budget offered by attorney and client for temporary orders is an educated guess based on very little data. If things change in the future, or if despite good financial discipline, you still cannot make ends meet, please make sure your attorney knows. Temporary orders are precisely that: temporary. They can be adjusted if new information is available that dictates changing the flow of money.

Ideally, we want to arrive at a financial division of responsibility that works, and maintain that division for several months before mediation, so that it is time-tested, familiar to the parties, and generally accepted before you go to mediation.

This financial challenge, like many things in a divorce, can be an opportunity for self-exploration and growth. In the face of budget constraints, you can really get to see what your priorities are (and adjust them, if need be). In custody cases, this is an opportunity to "put your money where your mouth is" as parents. It is really easy to talk about how committed you are to your kids. It is a lot harder to make financial sacrifices for their benefit. If you are out purchasing cars and going on extravagant vacations while your children lack things, that is going to reflect poorly on you as a parent. Conversely, if you save your money for things to benefit the children, or direct discretionary funds towards them, those actions carry a lot more weight than mere words about your priorities.

Stay tuned for future blog posts. Over the next several weeks, we are going to cover several aspects of temporary orders, including what they are, how they work, the effort that goes into obtaining them, and how they set the stage for the next phase of litigation.

As always, I hope this guidance helps you in your journey.