Opportunity Costs in Divorce

Nov 23, 2011

One issue that people frequently ignore in their divorce is opportunity cost

Opportunity cost is defined by my computer as “the loss of potential gain from other alternatives when one alternative is chosen.”

That’s a fancy way of saying that when you are doing one thing you are giving up the potential benefits of another.   It means that if you go west, then you give up whatever good things you would have found by going north, south or east.

So, what does that have to do with divorce? 

In divorce, people make choices from the day someone says that they want out until the divorce, and frequently far past that point.  They make choices about what to do with their energy, peace of mind, money, kids and stuff. The choose how to behave towards the soon to be ex-spouse.

In most cases, clients give some thought to the impact of their choice; i.e. “when I do this, the result will be ‘x’.” They think about the effect that will be brought about by their decision. 

What they generally fail to consider is the how that compares to the other possible decisions that they could make.  That is, they spend a lot of time thinking about what they’ll find if they go one direction, but very little time thinking about what they give up by not going another. 

For instance, when people choose to use an adversarial process for their divorce, they don’t give much thought to the benefits of non-adversarial processes that they are giving up.  They see what they hope to gain by duking it out, but they fail to see what the have given up. 

In many cases, people fail to see that choosing to fight about something is also a choice to forgo the peace of mind, free time or money that they could enjoy if they were to choose another way to handle their divorce. 

I frequently ask clients to consider what they could do with their time, energy and money if they resolved their case quickly and did not have to deal with their divorce anymore.  That gets them to think about the opportunity costs of the decision they are considering. 

Sometimes, it makes sense to continue the tough work of negotiation or a court battle.  But, that decision should only be made once the client considers the opportunity cost of that decision.

If you are considering a divorce, you may want to spend some time considering what you would do with the time, money, peace of mind and energy you can save by choosing to resolve your case through collaborative divorce, mediation or other non-adversarial processes.  

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