There have been many things said about the "cost of divorce". But in my reading, there is a calculation I have not come across. I'm not talking about the staggering emotional cost or the relational costs or the indirect costs. For this example, I'm talking about hard cash outlay, every month by the divorced parents of children. Let's look at just one expenditure:
I'm sure this has been calculated before, but it just occurred to me to run the numbers. After Jack and Jill divorced, they maintained separate households to care for themselves and their children. Compared to being married, Jack and Jill's combined housing expenses --rent, utilities, maintenance-- have almost doubled, but the same people are being housed, and no better than they were before. A very conservative estimate is that as parents, J&J are incurring "excess" housing costs of at least $1000 a month. (Your mileage may vary, but I can't imagine it would be less.) And while this pinches the pocketbook each month, the real news is in the savings calculator.
If that same $1000 per month were to have been socked away for the children, in a mutual fund at 8%, the accumulated value after 20 years would be over half a million dollars. That's real money. Carry that calculation out another 10 years. (Makes sense to think of it this way, as they will continue to maintain separate homes.) Now, the balance is $1.5 million. That is a very nice inheritance for the children.
Which Jack and Jill threw away.
I didn't know it was possible for ordinary human beings to squander that much money while living what we Americans would consider a modest normal lifestyle.
How many of us who found ourselves before a judge in divorce court, would have been able to openly say, "Yes, your honor, I know that this decision will cost my children over a million dollars in inheritance. It's worth every penny. Let's do it."
Perhaps we would have. Or just maybe, we might have done something differently...
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