Advice to Women in Divorce: Give Up The House
13 August 2006Here’s a tip you hopefully won’t ever have to use, but you should file it away in your mind just in case you ever do. Linda Stern has a new article out on the big problems women can face financially in divorces. I’m not going to touch her perpetual alimony suggestion with a ten-foot pole on a non-political site like this, but there’s some good advice in the article about an attitude many women adopt that hurts them down the line: the uncompromising desire to be the one who gets the house.
Then there’s the house, or “marital museum,” as Manhattan divorce financial analyst Michelle Smith calls it. “A weakness that often hurts women is their determination to keep the family house regardless of their ability to afford it in the long run,” she says. “They will trade away every asset in order to keep a house they may not be able to afford in five years.”
Divorcing women should be open to the idea of giving up the house and taking cold, hard cash — in the form of retirement investments — instead, she advises.
If you ever find yourself in that situation, you’re going to have to remember that you will have to pay property taxes on a house, you’ll have to keep making the mortgage payments, and your spouse may play hardball and get a lot of concessions from you if you’re determined to keep it. Whether you’re a man or a woman, the smart thing to do is probably to sell the house – you may need to downsize anyway with less people living in it, and you shouldn’t try to keep it if the payments are going to be too much for you to afford when you’re on your own. Divorce is often one of the worst catastrophes you can have in terms of your finances, so don’t make it harder on yourself by agreeing to a bad settlement out of sentimental value for something.
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