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Getting divorced? Financially preparing for what’s to come

As I prepared to write this post, I wasn’t sure of the tone that I should take since I feel that I should offer my condolences to half of you while congratulating the other half. And although I believe that divorce is sometimes the right choice, I rarely try to advocate it. So I have to wonder if I am enabling divorce by creating a how-to list. Either way, if you are getting divorced, then you need to financially prepare for what is to come.

Sitting by a pondIf at any point you feel that my tone is not appropriate considering the emotional turmoil that accompanies divorce, then simply understand that my purpose in writing this post is to help you with financial decisions. I am not a therapist or a shoulder to cry on. Please take no offense if I am to the point with my comments.

Complete and accurate financial records

Unfortunately, many divorce cases are fraught with deception. Further, it is not uncommon for the wage earner to have been hiding funds for years in secret accounts. Tax filings and W-2s help to establish how much money is coming in. Buy a banker’s box, hanging folders, and file folders (for organization) and make copies of everything. Hopefully, you and your spouse have been maintaining good financial records and all you’ll need to do is go to Kinko’s and start making copies. If you don’t have good financial records, then start going through old boxes or contacting employers, banks, etc.

Recording expenses during the divorce proceedings

You need to demonstrate what level of income is necessary to continue your normal lifestyle. This is very important if you are not the wage earner. For example, if you regularly buy gifts for family or enjoy eating out, then you need to establish a record showing that that is your lifestyle. If you go into the courtroom and just say, “I want $5000 a month,” without receipts that show that’s how much you normal spend, then you will have a difficult time getting that number.

Open new bank accounts and credit cards

As soon as the decision is made to get a divorce, then you need to open your own bank accounts and credit cards. This task may be especially daunting if you’ve never been very involved in your finances. As a side note, please always be involved in your finances. I’ve compiled a list of good articles and posts to read about banks and credit cards.

Bank Accounts

Credit Cards

One last note about your financial accounts. Make sure that you have designated primary and contingent beneficiaries on your investment accounts and where possible, have a someone else on your bank accounts. If you were to suddenly pass away without adding beneficiaries and co-owners, then your money may find itself stuck in probate for a very long time.


During the divorce and afterwards, you will be solely responsible for handling your finances. Budgeting entails categorizing the areas where you spend your money and then setting a specific amount of money that you are allowed to spend each month within the various categories. Do not mistake accounting, which is just keeping a record of where you spent money, with budgeting. Budgeting is an active process where you limit your spending, thus requiring discipline.

There are a variety of online and desktop applications that help you create a budget and then track your expenses. I do not intend to list them all here since there really are quite a few options. However, let me strongly recommend using, which is free. Mint is owned by Intuit and is therefore, well-funded and supported. For more info, read my review of

If you want to evaluate more options, then please read Budgeting Software: 13 Free Alternatives.

Your credit score and credit monitoring

In order to secure new credit accounts or a home, you will need to have a good credit score. Unfortunately, many Americans are unaware of what their credit score even is. First, a credit score and credit report are different. A credit report shows your credit history and a credit score is an indicator of how well you are able to manage debt or credit. You will need to review both.

Once a year, you are entitled to a free credit report from each of the three major credit bureaus. To obtain your report, simply visit Pull all three reports and make sure that everything is correct. Checking for errors is very important since your spouse’s bad habits may be credited to you.

If you have a particularly vindictive ex-spouse, then strongly consider signing up for a credit monitoring service that alerts you when something changes on one of your credit reports.

To obtain your credit score, create an account at You can check your credit score as often as you like. For more information about Credit Karma, read Review of Credit Karma – 3 Essential Questions Answered.

Should you Rent or Buy?

If you are able to stay in your current home, then you can probably skip this section.

Many divorcees are forced to sell their home and relocate as part of the divorce settlement. If you are forced to move, then you will face the age old question – Should I rent or buy? The answer depends on a lot of factors, such as how much of a down payment do you have? do you have good credit? do you have a steady and stable income? how long do you plan to be in this location?

For some help navigating this tough decision, you can use the resources below (all three include a financial calculator).


Divorce is miserable. I don’t care if you are the one leaving or not. Divorce is just not pleasant. That’s not to say that you may not be better off, but anything that involves lawyers is bound to keep you up at night. Therefore, it is essential that you take care to financially prepare yourself for what’s to come and not spend additional sleepless nights worrying about areas of your finances over which you have control.

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