This excerpt of “Worth It… Not Worth It?” was reprinted with permission from Business Plus/Grand Central Publishing.I’m not going to cover the nonfinancial aspects of divorce here, and I’m not suggesting that you should ride out a failed marriage for economic reasons.
But few events can torpedo your financial plan like a divorce. Think about your monthly mortgage payment—it’s probably a significant number, right? If your household becomes two households, add a rent payment on top of that. New couch, new bed, a second utility bill.
With only one person in the house, childcare just got more expensive. Oh, and you’ll each be writing a check to an attorney. Since I’m sporting both an X and a Y chromosome, I can’t help but come at the subject of divorce from a male perspective.
So, dads, be warned: Whether it’s a one-night stand or you take up with a really nice lady who is destined to be your second soul mate, the legal system does not look kindly on you. Your child support obligations will not stop just because your wife meets a nice millionaire. And you may go to jail if you fail to meet those obligations. Even the tax code smiles on your ex-wife.
Unlike alimony, those support payments are not tax deductible for you, but if your wife has custody, she gets the “head of household” benefits on her tax return. Plus she can take a $1,000-perchild tax credit in 2012, even if you’re supporting the kids.
And, while state laws vary, you can assume that if you’ve got $500,000 in a retirement account and your wife didn’t work, you can say good-bye to $250,000. Yes, it requires work to keep a marriage running smoothly.
But here’s some man-to-man advice. To all the other reasons that you stay faithful to your wife, add one more: a single night’s slipup could easily cost you a million bucks over your lifetime. Now, go tell your wife to sit down. You’ll clean up the dishes.