she told me that I need to move out because she needs the space to heal and can't get it with me in the house.
Does that sound like a reasonable request to you? Or does it sound like selfish, self-serving WAS behavior?
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She said she is physically, mentally, and spiritually exhausted.
It's all about her. You on the other hand are in great shape, right? Would you say her comments sound like solid, reasonable thinking, or selfish and self-serving? Is she showing any interest or concern in you or your well-being? If not, what does that tell you about her?
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She is at the end of her rope and that if i didn't move out, she would take the kids, move to her mom's and file for divorce immediately.
Do you think you would project a powerful, positive, confident image to her if you caved to every emotion-laced threat she makes?
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She also tries to look away or cover her face when I'am talking to her and it makes me feel like she's acting like a child.
So do you think it's wise to grant her childish wishes? If your children beg, cry and whine about a toy in the store, do you throw it in the cart just to appease them?
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I know everyone here has told me over and over not to move out, but again I'am confused whether to move out or not.
REALLY? What exactly are you confused about?
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or will she just be happy I'm out and continue to do nothing except plan to divorce me.
I'd say if you move out then yes, she'll probably proceed with her plans. You're letting her trick you into believing you'll be the hero for moving out. But your kids will likely think you abandoned them and she will have no respect for you for caving to her whims.
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If she moves out and takes the kids, that will be bad for the kids
So why would you let her take the kids? Do you think she has some "right" to them that you don't?
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and will make me feel like I did the wrong thing by them.
SHE wants to end the marriage. SHE walks out. SHE threatens divorce. YOU hold your ground. YOU stand for the marriage. Please explain how that is doing the wrong thing by your kids.