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How to financially survive a divorce

Smart financial tips for getting through a divorce or separation.

financial tips when getting a divorce

When I got married, I never imagined sitting in a lawyer’s office sorting through paperwork trying to divide up assets, nor the emotional struggle that divorce entails. Yet, here I am, divorced (and happily remarried again). I won’t bore you with all the particulars, but I lost virtually everything I once owned in the process. I lost my house, my vacation property in Maui, my retirement assets… even my prized cookbook collection. I also took on debt to help cover expenses like spousal payments (it’s not just for the guys!) — that, truthfully, I’m still paying off. This is even though I’m a CFP® professional and even though I knew my way around money.

For me, divorce was a time when I realized what really matters to me – myself. I had to lose it all to gain myself back, and for that, it was worth any price I had to pay. The process was daunting, long, and gut-wrenching. But it was also freeing, and I emerged stronger than ever.

Being a money expert didn’t exempt me from the financial and emotional unraveling that takes place in a divorce. I learned first-hand how to prepare both before, during, and after a divorce.

Here are financial strategies to help anyone survive a divorce.

6 short-term financial moves to prepare for separation or divorce

When a marriage dissolves, so many feelings are swirling that it can be tough to get out of bed, let alone tackle a to-do list of financial moves. I found it hard to focus on the tasks at hand. Make sure you allow yourself some self-care time between all the have-to items. Yes, that could mean permission to get a massage, take off work on a Friday to regroup, or work in some yoga and meditation.

While everyone’s situation will be a bit different, I’ve found these six checklist items to be somewhat universal no matter your financial situation.

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1. Hire a lawyer

Even if you and your partner are hoping for an amicable separation and divorce, it still may be a good idea to look for a lawyer. After all, your lawyer is your advocate, and chief negotiator, so hire one just for you. Ask your friends and family for referrals if you aren’t sure who to hire and remember that you can negotiate the fee. One of your most significant divorce expenses will be the lawyer (unless you can negotiate for your soon to be ex-spouse to pay for your lawyer fees). You’ll also find lower cost options like mediation, legal help centers and even pro-bono (free) legal options in each state. Find the help that fits your budget and will represent you well.

2. Open a credit card in your own name

If you don’t already have one, open a credit card that belongs just to you so you can start to separate yourself from your ex-spouse financially. In the best case scenario, joint accounts are closed and each spouse goes forward using only individual accounts while you work out who pays off what. Getting divorced is also the time to check on your credit score. If you don’t know your score, find out from one of the many free online sources (your credit card issuer may offer this) and work on ways to send it soaring.

3. Open your own bank account

If you’ve had joint bank accounts, now is the time to set up your own. Again, this is an essential step in separating your assets legally from your soon-to-be ex. Your attorney can help you decide on the best way to claim any assets held in joint accounts, and it’s a smart idea to speak with him or her before making any unusual withdrawals.

4. Create a shared list of financial accounts, including passwords

From bank accounts to car loans to investment accounts, it’s important to make a list of all your shared accounts and share all information with your ex-spouse. You may want your attorney to ask for it, but having this information is key for getting a holistic view of your financial picture.

5. Give yourself a financial audit

Once you, your ex, and your lawyers have come to an agreement on how assets will be split and who is responsible for what, it can be a good idea to come up with a plan for both short-term and long-term financial goals. What will your new budget look like? How will you contribute to any retirement or investment accounts? What do you want your financial picture to look like one, five, or ten years from now? Answering these questions will help you live within your means now and motivate you for your financial future.

6. Update documents

Before you remove your ex as a beneficiary on any policy, such as life insurance, speak with your attorney or work out an agreement with your ex. Once that’s done, update beneficiary info on documents such as life insurance, your will, an advanced health care directive, retirement accounts, investment accounts and any pay-on-death accounts like your savings account.

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Long-term financial moves to make following a divorce

One of the best decisions I made when I got divorced was to create an old-school vision board for my future plans and goals. Visualizing the future is a great way to keep yourself focused on the positive long-term financial changes that take place when you’re divorced. It’s time to start dreaming again – all those things that you wanted to accomplish… why not go out and do them while you’re focusing on building a new financial foundation?

Build up your emergency fund

Your emergency fund can take a beating in a divorce. Now that you have a new normal and are adjusting your budget, it may be a good idea to spend time finding ways to replenish your emergency fund.

Cover any financial or savings gaps

After you’re divorced, adjust the odds and ends in your financial plan. Here are a few questions to ask yourself to spur on your thinking, and it may be smart to consider working with a financial professional to make sure you’re not overlooking anything unique to your situation.

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How to divorce-proof your financial future

Of course, you hope divorce will never happen in your life, but you should do a few things now to ensure that you will be financially protected if divorce does occur. Some folks would rather avoid talking about money with their spouse at all costs, but ignoring the financial side of your marriage isn’t the best recipe for a healthy marriage.

Share passwords — and make sure to log in regularly

Knowing what assets and debts you have as a couple, how they’re being paid, and other relevant info is important for both partners. Often, one person takes the lead in financial areas, but both people can be in the loop.

Schedule regular money meetups

Money talks don’t have to be stressful — talk financial goals over happy hour or at a park with some fresh air. Talk about where you’re currently at with your money goals and any expenses that are coming up in the next week. Use these as a time to connect and dream together about your future.

Avoid weaponizing shared money

Whether it’s making a large financial decision without consulting a spouse or proving a point through a financial move, money can be used as a weapon to hurt your partner. Regularly communicating and compromising is key. It’s also important to remember that money can be triggering for many couples. If that seems to be the case for you, or it feels like the majority of fights revolve around money, it could be helpful to see a professional who can help you both with new ways to communicate about money in a positive, productive way.

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There isn’t a way to sugar coat it: Divorce hurts. Even in the best, most amicable situation, divorce can be physically, mentally, and financially draining. Part of taking care of yourself through this life event is protecting your money. And the good news is, you can survive. I did, and I had a nasty divorce. At the end of the day, looking to the future, and coming up with goals — both personal and financial — can help guide you in the right direction.

Shannah Compton Game is a CERTIFIED FINANCIAL PLANNER®  professional with an MBA and is the host of the award-winning podcast, Millennial Money, where she shares totally relatable and easy to understand financial advice that will actually make you want to talk about money. Opinions expressed by the author are their own.

Haven Life doesn’t provide tax, legal or investment advice. This discussion is intended as general education only. We encourage you to work with your own personal tax or legal professionals and your financial advisor. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel.

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About Shannah Compton Game

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Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our editorial policy

Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.

Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.

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