One of the common misconceptions about separation, divorce, and death today is that costs are cut in half. They are not. In fact, divorce in some cases can be more expensive in the long run. Even if a loved one dies, costs are reduced, but bills still need to be paid. Let’s take a look at some of the things you need to know if you are facing one of these life-changing events or find yourself living this truth.
Bills Are Not Cut in Half
Once you leave a relationship, the bills you used to pay together are now paid separately. Each of you will now need your own phone bill, your own Internet connection, cable TV, car payment, the list goes on. Sometimes divorced couples, or one who has lost a spouse, find that expenses can actually increase once they’re on their own. Food costs can go up if you cook or eat out more than you used to. Certain hobbies or other leisure activities might increase if one is bored or lonely. Some other surprising examples of increased bills are:
Car insurance – say goodbye to discounts for covering multiple cars
Cell Phone – lose discounts and cost-benefit of a family plan
Longevity Discounts – Newly established services are current market price
Entertainment – new singles find new activities to fill their new time freedom
Travel – change your expectations of free travel upgrades if the status level belonged to your former partner
Whether you consolidated your expenses or paid them, 50/50 doesn’t matter. When you become a one-income household, all your bills are still due. Your electric company doesn’t care if you’ve been divorced or widowed. Neither does your phone carrier. Everyone will continue to send a bill for the entire amount month after month.
Less Income or No Income? Expect to Pay
Sometimes divorce or death comes to those who never needed to work. Or maybe your spouse or partner was the sole breadwinner. Or perhaps both spouses worked, but one earned less than the other due to working part-time or under-employment while raising the kids. Expect your expenses to increase significantly. This situation often puts increased stress upon the lower-earning spouse. Even if they receive alimony and/or child support, this is often not enough to continue as is. You’ll need to get a job of your own if you want to continue to enjoy life as you always have. Otherwise, you’ll have to make some strategic cutbacks in your cost of living. Some adjustments may be temporary until your income increases, and you get back on your feet.
Take Care of Your Credit
When you are listed on any of your former spouse’s credit cards, now is the time to stoping utilizing their credit and open accounts in your name. The transition includes taking their names off any of your credit accounts as well. You need to establish new credit if you’ve never needed credit of your own. A surviving spouse who loses access to an existing credit account is frequently granted leniency and allowed to open a new account even if they lack a lengthy credit history.
Not sure what’s on your credit report? You’ll want to take advantage of your once-a-year free credit report from TransUnion, Experian, and Equifax to make sure your best foot is forward with your credit score. Thankfully, due to the Covid-19 pandemic, these credit companies are allowing weekly credit reports for free until April 22, 2022, through the website, AnnualCreditReport.com.
Change Your Beneficiaries
Once you’ve survived the death or a divorce process, you’ll want to update your beneficiaries. A divorce will not automatically change these designations, and neither will updating your Will. You’ll have to act intentionally when the time comes. It could also be that you no longer need life insurance. These decisions need to be made according to your specific situation.
Be Mindful
The best thing you can do for yourself is to go into the situation with open eyes. If your loved one has passed or you’re going through a divorce, know your expenses will not be cut in half but could, in fact, rise rather than decrease.
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