Divorce is a lot more common these days than it used to be. 41 percent of marriages end in divorce before their 30th year anniversary, according to Statistics Canada. Fighting over money is often the top reason.
Divorces can be costly, especially the unamicable ones. The average legal fees for an uncontested divorce is $1,845, while the average for a contest one is $13,638, according to Canadian Lawyer’s 2015 legal fees survey. And those are just the legal fees. It doesn’t include the division of your assets like your investments and debts.
But getting a divorce doesn’t have to bankrupt you. Here are some things to consider.

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Who Owns and Owes What

Each couple has their own separate approach for dealing with money. Some couples are open and honest about their finances, while others keep money hidden away from their significant other. Sometimes the husband or wife will even manage the finances and the investments alone, with their spouse left in the dark.
Even if you don’t particularly enjoy budgeting and personal finance, it’s still important to have a basic understanding. If you ever get divorced, you’ll be thankful you did. You’ll be better equipped to make decisions about how assets and debts are to be divided.
Don’t just spring this on your hubby suddenly over a candlelit dinner. It’s all about finding the right time. Once you’re ready, start by figure out what your assets (what you own) and liabilities (what you owe) are. Review financial statements together to see how your investments are doing (this can be the perfect time to assess their performance).

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Everything Gets Split Up – Even Your Spouse’s Debts

Choosing the perfect partner is important. Not only do you want to tie the knot with someone who’s your perfect match, you want to find someone who’s financially responsible. If you have opposite money personalities, you’re a saver and your spouse is a spender, it can lead to money disagreements and sometimes even divorce.
When it comes to divorce, everything gets split up, even the debt. For example, if you’re a diligent saver, invest carefully and maximize your RRSP and TFSA contributions each year, while your spouse maxes out their credit card and is in debt up to their neck, it doesn’t matter. The assets and debts during the marriage get split in half. Your spouse will get half of your investment portfolio, while you’ll owe half of their credit card debt. It may not seem fair, but that’s why you should be extra careful when choosing your better half.
When dividing assets, not all assets are created equal. For example, what’s more valuable, a $20,000 car or a $20,000 investment portfolio? The car will tumble in value over time (unless it’s a classic car), while the investment portfolio will grow. Don’t lose sight of this, especially when emotions run high.


Don’t Stretch Yourself Financially

While it would be nice to be able to afford to stay in the family home, that’s not always realistic. If you were already stretched financially when you had the paycheque of your spouse coming in, it’s probably better to take the proceeds and buy a smaller home. There’s also nothing wrong with renting. Divorce brings about a lot of changes in life, so buying a home right away may not make the most sense.