We tend to think of divorce as the separating of two people, a relationship event. But it's also a major financial event, involving the separation of two people's assets.
The dance of people coming together and splitting apart has parallels in the business world. There are mergers, for example, joining the lives and futures of companies. Think of when AOL and Time Warner (NYSE:TWX) merged to become AOL Time Warner back in 2000. Ask longtime shareholders how this marriage has fared, and many will grumble, as financial rewards have yet to appear in abundance, with many recommending a split-up. More recently, the pairing of GlobalSantaFe (NYSE:GSF) and Transocean (NYSE:RIG) has oil-services investors beaming like newlyweds. For other recent couples, such as financial services firm Wachovia (NYSE:WB) and Golden West Financial, and grocery retailer SUPERVALU (NYSE:SVU) and Albertson's, it's too early to tell.
Marriage and divorce can be traumatic both for companies and shareholders, and for spouses and partners. But in the end, a breakup can be the best thing that can happen.
On board
It was a little over seven years ago, after watching a friend go through a painful divorce, that I asked that the Fool open a discussion board to cover the topic of divorce. (Check it out -- it now sports more than 2,500 posts.) I launched the board with the following things that I had noticed or learned:
- A person who seems very nice, mild-mannered, and reasonable before the divorce can turn out to be surprisingly vicious and hateful.
- An "I want a divorce" announcement can come out of the blue -- or at least it can seem that way.
- It can be a very long process.
- It can cost many thousands of dollars in lawyer fees.
- It's worth seeking out a divorce lawyer's advice early, even if you expect the divorce to be amicable.
- Keep records.
- Despite all the grief and aggravation, a divorce can be for the best.
Since so many of the numerous aspects of divorce are unpleasant, it can be hard to see anything positive about it. But a recent discussion on our divorce board highlighted a bunch, including freedom from a partner with a conflicting approach to finances. Permit me to share some of them. (I'm focusing on the financial ones more, but you can read the entire discussion, which includes others.)
- Fool Community member "impolite" said: "I cannot tell you how many purchases were made against my better judgment, via [coercion] ... The near-constant 'no's I had to utter when we couldn't afford something, only to find it on a credit card bill later that month, etc. This is by far the biggest benefit to my divorce. Honestly. My bills are paid on time, and though I have little to no money (some months, I am counting pennies in the jar) -- it is mine. Everything is paid, on time, even IF he doesn't give me the property settlement amount as lined out in the divorce."
- "Patzer" noted: "I am now free to save money, to take a bike ride when I feel like it, to work late, to exercise at the gym, to have my own opinions. I no longer fear that on any given day I will find my household net worth has decreased by a few thousand dollars because of some expenditure that will cause me inconvenience over and above its cost."
- "SubGuy," after reading some others' perspectives, said: "Wow, I thought I had it bad. My total household income is MUCH less than it was, but I have all my bills under control and have more left over to spend or save as I see fit. I can say or do whatever I feel without walking on eggshells. I've regained my self respect."
- "Protomolly" shared: "I am not afraid to come home. I know what to expect on a day to day and hour to hour basis. ... I can spend my money any way I want to. I don't have to try to convince my ex to put money away for retirement or buy health insurance instead of spending it at the casino. I don't have to worry about the IRS or creditors."
These perspectives point out how influential money matters can be in a relationship, and how they can put enough strain on one to either break it or make it very unpleasant.
Couples and cash
If you're in a relationship, pay attention to finances. Try to be on, or get on, the same page with your partner. If you don't agree on how best to save, spend, and invest your money, you may be headed for trouble.
The following articles may be of interest:
- Couples, Sex, and Money
- Don't Let Money Mangle Your Relationship
- Marriage and Money: A Wedding Gift From the Fool
For more straight talk about money and how to keep more of it in your pocket while still making the most of life, check out our personal finance newsletter, Motley Fool Green Light. You can try it for free for a whole month, accessing all past issues, and there's no obligation. It covers relationships and money.
Longtime Fool contributor Selena Maranjian owns shares of Time Warner, which is a Stock Advisor recommendation. Try any one of our investing services free for 30 days. The Motley Fool is Fools writing for Fools.
