Unfortunately, divorce has grown to staggering numbers over the past few years; in fact, the United States is home to a divorce rate of almost fifty percent. That means, theoretically, that if two couples get married, it is likely that one of the two couples will undergo a divorce. Obviously, for two people to want a divorce, there has got to be some problems present in the relationship. However, what a lot of people don’t think about right away is the problems that can arise with a divorcee’s checkbook. Alimony, tax credits, and groceries will all change in the event of a divorce.
When you get married, seemingly there is an obligation to support each other (financially) in the event the two of you get a divorce. Typically, alimony is paid to the spouse who brings in a lesser income. Naturally, for the spouse who has to pay the alimony, his/her checkbook is going to foot the bill; however, there is a plus side to paying alimony. When it comes to doing your taxes, alimony is tax deductible, unlike child support (which could also restrain a person’s checkbook). Therefore, alimony could have a negative and/or positive effect on one’s checkbook. While one may have to actually pay alimony to his or her spouse, he/she could just as easily deduct the alimony paid from his/her tax return.
Aside from alimony, most divorcees have children. Obviously, a child cannot be split among two different people at the same time; therefore, that child, or children, will become the dependent(s) of one of the parents. Whoever claims the child will be the one who receives a Child Tax Credit back on their tax returns. As a couple, both parents would reap the benefits of the Child Tax Credit, but as a divorced couple, whoever claims the child as a dependent will be the only one who receives the tax credit.
A checkbook may get a break in the way of groceries, but not on overall bills. Since a divorce means that a person will not have a spouse to take care of, that also means that the grocery bill will drop from two people to one; less people means less groceries. However, a divorcee would have to take care of all the bills with his/her own income, rather than both spouses paying one set of bills with both incomes.
At this point, your checkbook is probably having some mixed emotions. In some instances of divorce the checkbook gets a break, and in other instances the checkbook has to work; still, your checkbook may not have to do anything such as with the Child Tax Credit. A divorce can bring with it many problems, from who gets to claim the children (if any), to how much money the divorce will end costing. Alimony, bills, lawyers, administration and more can all put a major strain on a person’s checkbook.