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Divorce rates are falling: Are Canadians too poor to break up?

divorce finance
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Why did Al and Peg Bundy from the sitcom Married… with Children never get divorced? After all, they were rarely happy and constantly arguing. Maybe they felt they were the best they could do for each other—a middle-aged homely shoe salesman and a stay-at-home mom with two kids. They cared for each other, but they also hated each other deeply. And neither ever cheated, despite having the opportunity.

However, what if the Bundys lived in Canada today? Would they have stuck it out together or gotten divorced?

Common preconceptions would have us believe that half the people who get married end up divorced, but that's never really been the case in Canada. A recent report from the Vanier Institute of the Family finds that rates in Canada have been declining since the early 1990s and reached a low in 2020 of 5.6 per 1,000 married people. That year, around 43,000 divorces were granted in Canada, the lowest number since 1973.

The report notes that part of the decline was down to the COVID-19 pandemic, as lockdowns disrupted and delayed court proceedings. It also mentions the decline could be due to the aging population, with less likely to divorce.

The lower divorce rate is also tied to the fact that fewer people—especially younger people—are getting married. In 2020, 98,355 marriages were registered in Canada, the lowest recorded since 1938.

Nonetheless, divorces are declining across the board for those who do decide to get hitched.

So, why are Canadian marriages less likely to end in divorce?

Divorce is just too costly

A big part of the reason could be the cost of living in Canada is too expensive to break up. Would Al, as the family's sole earner, be able to afford to divorce Peg, cover the legal fees of the divorce, averaging around $18,000, and bear the expenses of two households?

Could Al, a retail worker in his early 50s, survive a divorce, with an average salary of $73,793, taking home about $4,619 a month? We should note that for retail jobs, like salesperson, the income estimates here are optimistic, but using overall averages allows us to apply our thought exercise to more categories.

Housing is especially important in a Canadian budget. It is now very difficult for someone on the average salary to take on a new mortgage on their own. So divorced Al and Peg will likely be life-long renters. With an average apartment in Canada's major cities renting for well over $2,000 a month, it would be very difficult if not impossible for Al to support two households.

Let's say Al was able to get a mortgage to buy the family home. The average mortgage debt in Canada is $338,522. Assuming that they have 10 years left on the mortgage, the new monthly payment after refinancing at 4.79% would be a staggering $3,548. If they extend the mortgage to 20 years, there is still a monthly payment of $2,186; very significant for Al's net income. The family may have trouble renewing their mortgage.

A quick budget calculation shows that the Bundys, while still together, would struggle to support themselves: almost $1,300 a month on food expenses, over $300 average on utilities, another $400–$1000 for transportation as just a monthly bus pass is around $100. These costs would push them into living paycheck to paycheck. And that's without considering other costs necessary for a decent life, entertainment, the eventuality of medical expenses or other unexpected expenses.

Canadian inflation is steady at close to 3%, but it is possible that the monster hasn't been tamed. The Canadian dollar doesn't look very promising, putting additional pressure on future prices, especially for imports and commodities. Even with some easing on mortgage rates, the financial pressure on the Bundy family would be massive.

Affording retirement

Given those economic realities, it's likely Al and Peg would prioritize their practical needs over emotional complexities, in an unhappy but financially afloat situation.

Their emotional life may remain tense, full of conflicts, a tragicomedy. But Canadian Al and Peg simply can't afford to go their separate ways. The logistics of divorcing—selling the house or buying out one partner's share, dividing up decades worth of belongings and legal costs are definitely a factor compelling them to stay together, maybe even making it impossible to separate.

Even with two incomes, at the Canadian average of $121,771 (estimated by adjusting for inflation from Statistics Canada's calculation of $110,560 in 2021) the couple's situation, while better, wouldn't be much rosier if they divorce.

Note that if both members of a couple work they may have to pay additional childcare costs, around $714 per month for one kid, inflation adjusted. The couple would have to make significant lifestyle changes in case of a divorce, even as dual earners.

This would be even more difficult as the couple ages. A typical middle-income couple in Canada today does not have enough saved up to sustain their lifestyle in retirement, and would need to make lifestyle changes to outlive their savings.

To add to the complexity, older couples tend to be very well set in their ways, depending on each other for social legitimacy and other informal roles of married life. After so many years, who else is going to put up with Al's eating habits and snoring, or with Peg's likes and dislikes and phone calls.

Canadians are divorcing less, and not just because they might be afraid to be alone, break up their family or receive social backlash. They are not merely concerned with the difficulties of re-entering the dating scene after a divorce. More likely, they also fear the real financial hit and change in lifestyle divorce will inevitably cause.

Provided by The Conversation

This article is republished from The Conversation under a Creative Commons license. Read the original article.The Conversation

Citation: Divorce rates are falling: Are Canadians too poor to break up? (2024, May 13) retrieved 23 July 2024 from https://phys.org/news/2024-05-divorce-falling-canadians-poor.html
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