Financial Strain and Marital Fracture: The Connection
The Current Economic and Cost of Living Situation is Impacting Couples’ Decisions, Such as Having Kids, Postponing Marriage, or Getting Divorced in New Jersey
It is no surprise that Americans are paying more for just about everything. Inflation was over 9% in June of 2022; by March 2023, it had decreased somewhat. Stagnant salaries, hiring freezes, layoffs, bankrupt businesses, and outsourcing have weakened earning potential across the board. College graduates head out into the workforce with anywhere from $120,000 to $630,000 (or more) in educational debt, making buying a home a pipe dream because they cannot bear the weight of another loan. Frequently, they return to live in their childhood home with their parents to get on their feet financially—others room with up to 4 other people in a two-bedroom apartment to share costs.
Breaking Down the Cost of Living in New Jersey
The main components of a person’s economic needs are split into five categories: food, clothing, housing, transportation, and healthcare. Recent hikes in food prices are even more significant than those in the 1970 economic crisis. Eggs have gone up 32%, flour 27%, milk 20%, and animal protein, on average, is up 19%. Households aren’t affected by these increases, only with their grocery bills. When essential ingredients experience higher prices, the businesses that use those ingredients to make their products have to raise their prices, so a dozen bagels that used to cost $13.00 now cost $18.00. Food pantries complain that the need for donations is much higher than ever, and their supply does not cover the demand, meaning they frequently have to turn families away.
Gas prices have skyrocketed, hitting everyone’s wallet. People must cut back wherever possible to have the money to fill their tanks. Organizing errand running more efficiently, ride-sharing, using public transportation, and biking or walking whenever possible are all ways to keep fuel costs down.
Due to low inventory, housing prices are stable, but loan application requirements are stricter as loaning institutions can afford to be selective. Regarding rent, metropolitan areas have experienced an increase and are finding less availability as some owners sell properties in search of higher liquidity. The national average rent for a 2-bedroom, 2-bath apartment has increased anywhere between 14% and 23% and continues to climb.
Health insurance is one of the biggest concerns. High copays or an inability to get insurance lead to avoiding preventative medical visits (also known as “well visits”) or an outright refusal to seek medical care due to the prohibitive costs. Homes are lost to bankruptcy, medicines are rationed to last longer, and treatments are shared between friends and family without a doctor’s supervision to keep costs affordable.
How Is the Increase in the Cost of Living Affecting Couples?
Many couples choose to live together before they normally would save money on food, housing, and transportation. Sharing the living expenses is more manageable than living in different places, each with their costs. Postponing a wedding or having a significantly scaled-down event is not uncommon in today’s financial times. Sometimes, couples also postpone having a family. They feel it is important to own a home before having children. Children are expensive and bring a slew of economic challenges from prenatal care to delivery to childhood on to their 18th birthday. It is estimated that it cost approximately $264,100 to raise a child in the U.S. in 2020 (according to the U.S. Dept. of Agriculture).
Moreover, the overall stress from economic troubles can cause a severe strain on a relationship, especially if there is no healthy communication about money. Financial issues are the number one reason couples get divorced. When a couple struggles financially, their predominant emotion is fear, which is projected as anger in an effort of self-preservation. That is when the arguments begin. Due to the tension and economic distress, some people turn to alcohol or other substances to abate their worries which only causes more financial problems, exacerbating an already precarious situation with their partner.
These economically troubling times have led some partners not to discuss divorce, even if it is what they want, for fear of being unable to afford it. Also, another factor is the fear of not having the money to live independently. Being economically vulnerable is stressful and can be downright scary.
Strategies For Couples Dealing With Financial Stress
It is imperative that couples sit down together and create a budget, discussing who makes what and how much needs to be paid to whom. People don’t feel comfortable talking about money, and a lack of understanding regarding household finances drives a wedge between the couple. If one partner provides more economically, they may feel they have the right to make all financial decisions. Moreover, tempers can flare when one person’s spending habits are not congruent with the amount of money coming in. Many non-profit organizations offer seminars on how to make a budget and provide steps for wiser spending. Couples can strategize and analyze their financial necessities and pitfalls by working as a team and negotiating their way to a stabler economic situation.
Couples can look for ways to reduce their expenses, such as cutting back on dining out, entertainment, and shopping. They can also consider downsizing their home, selling a car, or finding more affordable alternatives for the services they use. Daycare has become so prohibitively expensive that sometimes it is better for one parent to stay home, at least part-time.
Looking for ways to increase their income, such as finding a higher-paying job, starting a side business, or taking on freelance work, can help when things are tight. They can also consider selling items they no longer need or finding ways to monetize their hobbies or skills. Couples can take advantage of community resources, such as food banks, utility assistance programs, and housing assistance programs. These resources can provide temporary relief from financial stress.
Due to financial stress, couples may experience stress, anxiety, and other emotional challenges. They can seek emotional support from friends, family members, or mental health professionals. What is key is to keep the channels of communication open and save some time for each other as a couple. Date night can be a picnic at a local park or blowing bubbles off the back porch while a relative or friend takes the children for a few hours.
The Impact of Recession on the Outcome of Divorce Settlement Negotiations
Recessions can significantly impact divorce settlement negotiations, including those in NJ. During a downturn, asset values may decline, including the value of investments, real estate, and business interests. This can impact the distribution of assets in a divorce settlement, making it more difficult to divide assets fairly. Some couples may decide to hold off on the sale of the home until the market improves to avoid being “underwater” at the time of the sale, meaning they owe the bank more than what the house is valued at.
Job losses and reduced income may occur, which can impact the ability of either spouse to pay alimony or child support, thereby influencing the amount of spousal support awarded. Household debt and expenses may increase, particularly if one or both spouses experience job loss or reduced income. This can impact the distribution of debt in a divorce settlement and affect the financial standing of both parties.
When Financial Issues End in Divorce in NJ, Contact our Attorneys for Compassionate Assistance
Conducting divorce settlement negotiations is more challenging when one or both spouses are experiencing financial difficulties. However, with the help of a skilled family attorney, it is still possible to reach a fair and equitable settlement that meets the needs of both parties. At The Montanari Law Group, our divorce attorneys are seasoned professionals with a deep understanding of how these tough economic times can have an effect on New Jersey couples who have decided to separate. A divorce doesn’t have to be contentious and hostile, but the process is complex and extensive. It is in your best interest to lean on us to get you through your separation most equitably and reasonably possible. We serve clients in Short Hills, Hawthorne, Millburn, Franklin Lakes, Nutley, Haledon, Woodland Park, Ridgewood, Clifton, and towns across Northern New Jersey.