You may no longer be romantically involved with your ex-spouse, but that doesn't mean that their finances don't affect you. Couples who have divorced or are divorcing can still have arguments about finances, even if they have remained amicable. Older couples in particular face unique challenges regarding money, investments and retirement.
Here, we'll take a look at some of the most common late-in-life arguments about money, and some tips to help you cope with them.
1. Spending too much money
If you are watching your former partner spend money like it grows on trees, you aren't the only one. Over-the-top spending is one of the most common arguments about money.
- Get to the bottom of why he or she is spending so wildly. There is often an emotional reason that explains spending binges. Perhaps he or she is having a hard time coping with the divorce, is bored during retirement and shopping to pass the time, or has complex feelings about an adult child growing up.
- Discuss the spending honestly with your partner and have concrete evidence like bank and credit card statements and receipts.
- Suggest that they set up a slush fund or create a budget.
2. High-risk vs. low-risk
Some people choose to invest in high-risk, high-payoff ventures, while others prefer to be more conservative. If you feel that your former spouse's finances could benefit from a bit of risk, you could:
- Consider why he or she is financially risk-averse. Adults who grew up with insecure finances are sometimes more conservative with money
- Discuss the worst-case scenario of the investment so that both of you can accurately assess the risks.
- Take baby steps such as investing small amounts of money in high-risk ventures.
3. Cutting off the kids
Your children may not legally be dependents anymore, but many parents still choose to assist their grown kids financially. An argument may spring up when one parent wants to keep supporting their adult children but the other parent wants to cut them off.
- Have a frank discussion with your children about their financial needs and their future. This may lead to a decision about whether to cut them off or keep supporting them.
- You can also make financial support conditional: Perhaps you offer to keep supporting a child on the condition that he or she is in school or working. You could also stop making gifts and start making loans that must be paid off at a reasonable time.
- Even if you and your co-parent disagree, present a united front to your children and stand firm on your decisions.
4. Retire now, or later?
Retirement accounts play a significant role in divorce. Deciding when to retire can cause a lot of conflict, particularly regarding the future of your retirement funds.
- Try to refrain from being impulsive; talk it through, and try to see the other person's perspective.
- Ask your partner why he or she wants to retire when they do. Maybe they are seriously burnt out from their job; conversely, perhaps they would seriously miss the work that they do.
- Do the math carefully. An attorney can also help you work through the complications regarding retirement accounts and divorce.
5. Downsizing dilemmas
Even after an agreement about property division has been reached in a divorce agreement, real estate can remain contentious. Especially regarding the marriage home or the place where your children grew up. Maybe one spouse now wants to sell the home and downsize to a smaller place. Before an argument gets contentious...
- Take an objective look at the financial realities of keeping the house. Does it make sense to keep paying the mortgage? Is it still affordable? Could the money be put to better use?
- Consider whether the home will be practical in your twilight years. It may not be physically possible to navigate the stairs or use the bathrooms.
- Get creative: Rent out a room to a tenant for extra money, or tour other houses and condos to see what they are like.