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Inflation And Its Effect On Your Divorce


One of the biggest news stories right now is inflation. You can’t go anywhere without noticing higher prices, from the grocery store to the gas station to your favorite restaurant.

Inflation can also affect your relationships, namely your marriage. Not only can it lead to divorce, but it can also make you divorce more expensive.

While inflation often reduces purchasing power, it can lead to increased wealth if you have certain assets. Therefore, if you are going through a divorce, you need to know how inflation will affect certain elements.

Some Assets Will Increase in Value

Your dollar may not seem to go very far, but if you have stocks or real estate, their values may increase over time. These are strong investments, so if you get these in a divorce, keep in mind that they may be more valuable than you think.

Financial Support Pays for Less Over Time

If you’re receiving alimony or child support, your payments won’t go as far as they used to. Your payments won’t increase, but because prices are increasing everywhere, you don’t get as much for your money. In a few years’ time, your child support payment won’t pay for the same bills.

Prices of Large Expenses Also Increase

Even things you don’t buy regularly will go up over time. Cars, appliances, vacations, college tuition, retirement expenses — these expenses won’t stay stagnant. Inflation affects everything, so expect to pay more for larger, less common expenses. Keep this in mind as you settle your divorce.

What Can You Do?

While you can’t predict just how much prices will go up after a divorce, there are a couple things you can do to estimate how inflation will impact you. Here’s how to prevent financial issues from getting out of hand:

  • Include an escalation clause. Add a cost of living provision to your alimony or child support payments. This will tie the payments to the annual cost of living increases, so you’ll get automatic increases based on inflation rates.
  • Hire a financial specialist. A CPA or Certified Divorce Financial Analyst can make inflation calculations for you and help you understand how much money you will need to maintain your standard of living over a long period of time. An advisor can also help you value your assets.
  • Invest cash. Take a portion of the cash from your divorce settlement and invest it in a balanced portfolio. Hopefully your money will grow at a rate that exceeds inflation so you come out ahead.

Contact a Maryland Family Law Attorney Today

Inflation affects many aspects of life. Not only are grocery and gas prices going up, but it could cost more to get divorced as well.

Learn more about the true costs of divorce. A Columbia divorce lawyer from The Law Offices of Todd K. Mohink, P.A. can help. We’ll work hard to make your divorce simple and less expensive. Call (410) 774-5987 or fill out the online form to schedule a consultation.


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