Divorce is one of the most emotionally challenging life events that a person may go through. With all of the strong emotions a person may feel, it's easy to forget the financial side of things. Divorce can be a financially complex period in your life. Whether you are in the middle of the process or just starting to think about it, taking the right financial steps can help you protect your future and reduce unnecessary stress.
Before divorce
The goal is to protect assets, gather information, and prepare for change
1. Collect all financial records
- Bank statements (checking, savings, CDs)
- Retirement accounts (401(k), IRA, pensions)
- Debt records (credit cards, loans, mortgage)
- Tax returns for the 3-5 years
- Pay stubs and income records
This documentation will help you and your attorney get a full financial picture
2. Open accounts in your name
- Open your own checking and savings account
- Apply for a credit card in your name (if you don't already have one) to establish independent credit
3. Check your credit report
- Get free reports at www.annualcreditreport.com from all three bureaus
- Look for accounts you didn't know about and monitor your credit score
4. Create a post-divorce budget
- Estimate your new income and expenses
- Factor in housing, insurance, childcare, and other essentials
- Identify where you might need to cut costs or increase income
5. Consult professionals early
Getting advice early can help you avoid costly mistakes
- Divorce attorney
- Certified Divorce Financial Analyst (CDFA)
- Financial counselor (Hi there!) for budgeting and debt management
After divorce
The focus shifts to rebuilding, protecting, and planning ahead
1. Separate all joint accounts
- Remove your ex-spouse from joint credit cards and loans
- Close or refinance joint debt if possible
2. Update all beneficiaries
- Retirement accounts, life insurance, and even your will may still list your spouse.
- Make sure these reflect your new wishes
3. Rebuild your emergency fund
- Aim for 3-6 months of expenses
- Start small if needed. Automating even $20/week can help
4. Review health and life insurance
- Ensure you and your dependents have adequate coverage
- Explore options through your employer or private providers
5. Plan for long-term goals
- Revisit your retirement plan
- Adjust savings for college funds if you have children
- Consider new investment strategies that fit your single-income lifestyle
Need more help?
A divorce changes your financial life forever, but it doesn't have to derail your future. By taking proactive steps before and after your split, you can protect your assets, rebuild your credit, and regain a sense of control.
At Walters Financial Wellness, I help clients navigate big life transitions like divorce. I provide clear strategies and compassionate support. If you are facing this change, know that you don't have to do it alone. Contact me for a consultation!