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Dealing with the Financial Aftermath of a Divorce During the Pandemic

April 16, 2021

There’s no question that the pandemic has affected nearly every aspect of life—from health and wellbeing to finances and work. And as we navigate these new challenges, some people find that coronavirus stress is also creating new, unexpected tensions in their marriages and relationships.

A recent poll by market research firm Ipsos found that 27% of adults say they know a couple who are likely to break up, separate, or divorce when the pandemic ends. And nearly one in 10 married or partnered people say they’re personally likely to separate from their spouse at least in part because of pandemic-related issues.

Becoming a ‘COVID Casualty’

What’s happening? Tara, a 43-year-old from Ontario who has been separated from her husband of five years since August 2020, believes for some partnerships, COVID-19 may have unleashed a perfect storm to fall apart as a couple. “The strain of the last year took its toll, bringing all our marital issues to the surface,” Tara says. “I view it as a COVID casualty.”

“It was like living in a pressure cooker. My husband and I were both working from home, and then my daughter started online learning,” Tara says. She and her husband had to take turns working during the day, and often into the evening, preventing them from spending any meaningful time together as a couple. “Once the novelty wore off, the three of us found ourselves living on top of each other, and the dormant issues in our relationship we hadn’t dealt with bubbled to the surface.” Her husband asked for a separation last summer.

Recognizing the Positives

Experiencing a dramatic change of circumstances amid a global pandemic has been “extra-traumatic,” Tara shares. But she’s taking steps forward toward what she defines as “my new reality.”

For one thing, she feels fortunate to have been able to stay in their marital home in Ontario with her elementary school-age daughter, who stays with her for half the week. She believes the main advantage during this time is getting the chance to really enrich the mother-daughter relationship. “Since I don’t get to spend as much time with her, I try to really make it worthwhile when we do,” Tara says.

What’s more, Tara’s also thinking about future opportunities, like augmenting her work and economic security and figuring out a financial plan that works for their new life.

Focusing on Finances

Getting a solid understanding of your financial situation is a key step in any divorce process as it guides both the separation agreement and the foundation to build a new budget. In Tara’s case, divorce encouraged a healthier focus on finances. “As someone who hates math and hasn’t been overly concerned with money matters in the past, this separation has forced me to get more up to speed regarding my finances and debt.”

Tara says it helps to have a clear picture of where you stand–like what you have, what you owe, what’s essential for your life, and what’s a nice-to-have.

For her and her husband, this fresh review initially meant taking a harder look at day-to-day expenses to see where they could cut back. They’ve agreed, for example, to curb spending on ordering take-out. “Uber Eats costs add up in a hurry,” Tara reasons, “And we’ve also had to keep an eye on online spending and not get carried away ordering stuff we don’t need.” With both partners focusing on the financial logistics, they’re better able to prepare for emergency needs that may creep up with their daughter and personal lives.

Navigating a New Chapter

Going through a divorce can bring up a wide range of emotions—like sadness, fear, anxiety, or relief. Tara describes the current situation as if “we’re still wading through it, sometimes getting stuck and finding it hard to push forward.” But even though the beginning can be incredibly overwhelming, many find a satisfactory ending once the divorce is finalized.

In fact, according to the most recent Fidelity Investments’ Divorce and Money Study, the vast majority of men and women report recovering both emotionally and financially from their divorce experience. Moreover, nearly 60% say they’re now in better shape financially than they were when getting divorced. And about 80% say they feel better emotionally, too.

When it comes to uncoupling, the study suggests the chances for a better outcome and a “successful” divorce improve when both people are mutually engaged in their current and future finances.

This was the case for Philidelphia based LendingClub member, Christie. The financial stress following her divorce inspired her to take meaningful action over her finances. She developed a short and long-term plan and, with LendingClub as a partner, gained control over her financial future. Watch her story here.

Even if you aren’t thinking about a separation, being an active participant in your family’s financial matters might just open doors for better communication and overall wellbeing. It’s never too early or too late to make a plan, stick to it, and hit your financial goals.

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