Love Is a Battlefield: Is Your Money the Casualty of Divorce?

Few things in life make you feel as emotionally distressed as a divorce. Managing your emotions is only the first step in navigating a psychological minefield that can cause you to regret your financial decisions more than the bad relationship you just left. If you are not prepared to handle your finances post-breakup, then your money may be a casualty, and you’ll be feeling the negative effects well after your heart begins to heal.   

The Brain During a Divorce

Good financial decisions are rooted in the prefrontal cortex (front part) of the brain. That’s because the prefrontal cortex plays a critical role in planning, reasoning, impulse control, emotional regulation, and decision-making. When functioning optimally, this part of the brain helps us weigh pros and cons, consider future consequences, and act in alignment with our values rather than our immediate emotional reactions. All good financial behaviors.  

Unfortunately, during a divorce, the prefrontal cortex can become muted due to the increase of cortisol in the brain.  Cortisol buildup, which comes from stress, can result in the brain shifting to a survival-like mode, with more emotional thinking, whereby the amygdala becomes hyperactive. Once the amygdala is hyperactive, bad decisions are just around the corner, because the brain demands dopamine.  

Why dopamine? 

Dopamine combats cortisol. Our brains are hard-wired to seek out dopamine-inducing behaviors because it’s good for our survival. However, once the brain recognizes some behavior as capable of producing high levels of dopamine, the amygdala remembers that behavior and wants more of it. To reduce the increased stress caused by divorce, your brain seeks out unhealthy financial behaviors that produce short-term hits of dopamine. The more of these behaviors you undertake, the more your brain remembers them as good for you, and that can ultimately ruin your long-term financial plans.

Bad Divorce Financial Behaviors

So, what happens during a divorce? You go nuts for dopamine-inducing financial behaviors.  

Here are a few examples, as well as how they can derail your financial progress:   

Impulsive spending:

It is very common for a spouse to go shopping, traveling, or even splurge on the kids during the divorce. This could be the result of newfound independence, a sudden reduction of obligations due to time sharing, or a desire to connect with support systems, like friends and co-workers. Because the time spent away from facing the issues related to divorce can create hits of dopamine, you feel more inclined to charge that card or “treat yourself,” but fail to consider how it affects your long-term goals.  

Financial paralysis:

Ignoring that bill or financial obligation. Seeing extra money in your account can make you feel good (dopamine), but if you’re not meeting your financial obligations, like taxes, insurance, savings, and investments, you are hurting your long-term goals. Likewise, not having a plan and believing your former spouse will take care of it may leave you with financial surprises that negatively affect your credit and other obligations.  

Revenge spending:

What separates this habit from impulsive practices is that this behavior is designed to get the attention of your former spouse, because the thought of them being jealous produces dopamine. Here you’ll find yourself getting a new car, a new apartment, or even entering a new business venture, because of how you perceive it will make your former spouse feel. I had a client who obtained a second mortgage on their primary home to start a house flipping business just because they wanted to “prove” to their former spouse that they could make it as a real estate investor. Unfortunately, that client failed in that endeavor, and they ended up losing the family home.

Avoiding These Pitfalls

When it comes to managing your finances during a divorce, help is critical to navigate the battle in your mind. A third party can help you identify when your emotions are influencing your spending. Some self-help practices include pausing before you buy, budgeting for needs and wants, or even calling a pro before you go. It’s natural to be vulnerable during a divorce, but that doesn’t mean you have to fight the battle alone.  

Even better, work with an Accredited Financial Counselor® to create a plan that protects your assets, helps you meet your obligations, and provides guidance rooted in long-term, evidence-based, and personalized objectives. An AFC is a great ally during divorce and can help you identify patterns and opportunities that you may be missing.  

The key is not to navigate the psychological tug-of-war in your brain during a divorce alone. Instead, seek out professional advice and come out stronger and better prepared for a healthier and more financially stable future, for yourself and maybe even for the next relationship.  

Dr. David Fernandez is an Accredited Financial Counselor® and Founder of VCR (Veteran Conflict Resolution) Mediation & Consulting, which gives clients the clarity, tools, and support they deserve when life gets complicated, without having to resort to litigation. Visit David’s FindAnAFC profile to view his services along with his LinkedIn profile. VCR Mediation & Consulting can be found on Facebook, Instagram, and YouTube.