Why Holding On to the Family Home After Divorce Isn’t Always the Best Move
A client came to me recently with a story that, unfortunately, I’ve seen play out more than once.
Twelve years ago, she divorced her husband. She had been working for herself as an angel investor in property, not with a steady salary but with irregular income depending on deals.
When the divorce settlement came through, she decided to keep the family home. It felt safe and familiar, a place where she could rebuild after the marriage ended. She paid out her ex-husband and took on the 40% remaining mortgage herself.
But here’s the problem: without a regular income, the debt became unmanageable. Within a year, she was forced to sell.
What Happened Next
Instead of using the sale proceeds to downsize into something more manageable or securing a stable job, she rented. And not cheaply. A significant chunk of her cash went straight into rent.
The rest she placed into investments. But those investments did not perform well. Over time, her safety net disappeared.
Today, she has little left to show for it and has been forced back into the workforce, not because she wants to, but because she has to.
What We Can Learn From This
The Family Home Isn’t Always the Best Asset
After divorce, many people cling to the family home as a symbol of stability. But without the income to support it, a home can quickly turn into a financial trap.Cash Flow Matters More Than Comfort
It is tempting to think in terms of security and familiarity, but without regular income, even the best assets can become liabilities. Before making a decision, run the numbers: can you really afford it month to month?Rent Can Drain Wealth Quickly
Paying high rent may feel like a temporary solution, but it eats into capital far faster than most people expect. Without a plan to replace that money, savings can disappear in a few short years.Investing Without a Strategy Is Risky
Putting leftover money into investments without a clear plan or advice is more like gambling than investing. It might work, but too often it doesn’t.Stability First, Growth Second
In times of transition, the priority should be financial stability: downsizing, securing regular income, and preserving capital. Once the foundations are solid, then you can look to grow wealth again.
Final Word
This story is not about failure, but about the danger of making financial decisions based on emotion rather than strategy. Divorce is emotional enough, and when property and money are involved, clear thinking is critical.
If you are facing this kind of decision, whether to keep the house, sell, rent, or invest, take a step back. Look at the numbers. Look at your income. And ask yourself: will this choice give me security, or will it cost me peace of mind down the track?
At Financial Wellness Hub, we help clients through exactly these moments. We strip back the emotion, focus on the facts, and build a plan that works for your next chapter.
Because the goal is not just surviving divorce, it is having the freedom to thrive afterwards.
Book your complimentary session session and let’s talk about your situation.