Divorce ain’t gonna fix him
(money mismatch lingers on)

In marriage, finances are often a source of conflict, so it’s no wonder money can be such a hot button in divorce. There’s a big, broad line that has savers on one end and spenders on the other. Where we fit depends on our money attitudes. Does he refuse to waste money updating the furniture you’ve had since university? Or is he the king of gadgets buying every new technology…on credit, no less? If you can’t agree about money now, divorce ain’t gonna fix him, honey.

Finance may be a world of logic but our individual money attitudes are pure emotion.

Finance may be a world of logic but our individual money attitudes are pure emotion. In the extreme, a saver can have an irrational fear of poverty while a spender lives in a fantasy world where any day some outside force, like a huge lottery win, will come along and put their finances back on track.

Saver vs. spender

Savers think about the future. They spend less than they earn today in order to put aside money for when they will need it. Spenders on the other hand, live in the present. They spend their paycheck (and often more) assuming the future will take care of itself. As a couple, a saver/spender combination can balance each other out, but it’s also a potential hot bed, of the arguing kind. Where like marries like, either savers or spenders, they’re more likely to see eye to eye on the family finances.

Spell it: R-I-S-K

R-I-S-K is the four-letter word of finance. Some people can’t live with it and others just can’t live without it. Financially, we can be very conservative or high risk-taking depending on our personality. So, even two savers can have money conflicts about how to invest their savings if one person wants the certainty of GICs and the other wants the growth of the stock market.

If you argued about money before your split, it will continue to be a problem after your separation. Understanding your part in the family dynamic can help.

Are you a spender?

If retail therapy is your way of coping with stress, then divorce may be a difficult adjustment. Two separate households are more expensive than one. Even with child and/or spousal support, the total amount of income that your combined family spent on necessities like food and shelter for one household must now stretch to fund two households. Those extra costs will have to come from discretionary spending (i.e. things you want but don’t necessarily need). If there are no discretionary dollars, you’ll both have to make some big adjustments.

Savers don’t always win

Being a chronic saver can be hazardous to your divorce as well. One woman angrily told anyone who would listen about her ex, now living in a beautiful new home with all the amenities while she and the children were still living in their old home that hadn’t been repaired for years. What she didn’t see was that she had consistently resisted spending during their marriage and the lifestyle she had was her choice. He had moved on, borrowed money and was living the lifestyle he wanted.

Don’t try to teach an old dog

A marriage is a financial union. Separation of assets and awards of support are not about punishment or revenge. The process is designed to protect the children of the marriage, to divide what you acquired during your marriage and if applicable, to support the lower income spouse, usually the woman, for a period of time to increase her earning potential through retraining or to allow her to gradually adjust to her lower income in the future. Whatever bothered you about your husband will infuriate you about your ex - if you let it. Just don’t go there.

Ref. Divorce dollars, get your fair share: financial planning, during, and after divorce / Akeela Davis, 2006

This article was provided with permission from the writing and expertise of Anna-Marie Lyons, MBA, FCSI, CFP, a Financial Planning Consultant at RBC Dominion Securities in Vancouver, BC. Anna-Marie recognized a gap in meeting the financial planning needs of divorcing clients when she went through a divorce herself. The experience motivated her to become a certified Financial Divorce Specialist. She now advises clients in financial transition, whether through divorce or estate planning. You can email her at anna-marie.lyons@rbc.com.

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