Divorce can be devastating emotionally, but a new survey suggests that the financial effects can be just as long-lasting.
Financial services company Fidelity Investments sought to find out how divorce can impact the overall well-being of consumers’ finances. To do so, they surveyed 1,107 adults between the ages of 25 and 75 who had divorced a spouse within the past six months to 10 years.
For many respondents, the path to financial recovery has not been easy — more than one-third of respondents (35%) said they had not completely recovered financially five years after their divorce.
Men and women differed on when the financial stress of divorce hit them, the study found. Men appeared to feel it sooner, with financial stress outweighing emotional stress for men before the divorce was finalized. Women, on the other hand, tended to report that financial stress exceeded emotional stress after the divorce was complete rather than before.
Lessons for married couples
The survey also yielded some findings that could be beneficial to couples who are still married. Specifically, the survey found that divorced adults who were actively engaged in their household’s financial planning recovered faster financially after divorce.
Most respondents — 85% of women and 83% of men — said they were involved in the day-to-day finances of their household. However, only 60% of women were involved in long-term financial planning and retirement investing, compared to 82% of men.
The survey found that 61% of those who were actively involved in long-term financial planning during their marriage are in better financial shape post-divorce, compared to only 50% of those who were not involved. Likewise, 37% of those who were not involved in long-term financial planning during their have yet to recover financially after their divorce. Only 27% of those who were involved in their household’s long-term financial planning feel like they have not yet recovered.
Additionally, only 28% of divorcees who were involved in daily or long-term financial planning were surprised by the costs of living on their own, compared to 37% of those who were not involved in financial planning. Furthermore, a higher percentage (70%) of those involved in their household’s financial planning were happy with their divorce settlement compared to 63% of those who were not involved.
The good news is many respondents implemented better financial strategies as they moved forward after divorce. In fact, 60% of those respondents who have since remarried say they are now more involved in the management of their day-to-day finances, and 35% say they are now more involved in managing long-term savings and investments.
No couple wants to believe their relationship won’t last, but it’s a good idea to learn financial lessons from unions that don’t. After all, getting married changes your finances in a number of ways. Make sure you and your partner are on the same page before tying the knot, as well as throughout the various milestones of your marriage. Also, work together to tackle financial challenges, such as paying off debt. That way, you may avoid money disagreements and both of you will have a handle on your finances if you do end up parting ways in the future.