Navigating Life Changes: How to Deal with Divorce

Navigating Life Changes: How to Deal with Divorce

Enduring a divorce is one of life’s most stressful events, regardless of the length of the marriage or how amicable the separation might be. Having to deal with the intricacies of a divorce settlement can feel absolutely impossible, especially when negotiating the mental upheaval as well.

But as difficult as it may be amidst complicated emotions and grief over the end of a relationship, there are a multitude of logistical and practical details – sometimes long-lasting – to be worked out, including the fair division of assets, negotiating spousal support, and agreeing on custody of children.

To help make this time in your life a little easier, I’ve compiled some useful guidelines to help ensure that your finances are in order and ready to support you as you turn the page and step into a new chapter of your life.

How to Successfully Navigate Divorce

When your world has been turned upside down and your heart is hurting, it can be hard to deal effectively with your financial life. But a divorce settlement must not be taken lightly. You must go into negotiations fully equipped with the knowledge you need to make the right decisions for you and your financial future.

Going through the process of divorce can be an opportunity to start fresh and will hopefully provide you with a sense of empowerment as you take the necessary steps to learn more about good personal financial habits and adapt and thrive in your new reality.

Take Stock of Your Financial Situation

First, you need to fully understand your financial worth – and that means your spouse’s worth too. You need to be able to make well-informed decisions when it comes to division of those assets, and it can often be quite complex.

During your marriage, hopefully you have taken part in managing your family’s finances. If so, you should have a good awareness of your assets, from retirement accounts to investment accounts and even real estate. If you haven’t been involved in your family finances, you will need to play detective here and locate the assets you can.

The first step is always to locate and list all debts and assets. You will want to pull a current copy of your credit report from one of the three credit reporting agencies.

You are entitled to a free credit report each year from the three major bureaus, Transunion, Equifax and Experian, which can be accessed via You will want to make sure there isn’t any debt in your name that you’re not aware of.

I have women come to me frequently that have been blindsided by their spouse asking for a divorce and they don’t have any time to prepare. A tax return, bank statements, credit card statements, etc. can give you valuable information. Hiring a reputable attorney who is knowledgeable in finding assets is very helpful as well.

Build and Connect Your Support Team

In general, both you and your spouse will need to disclose your assets, liabilities, income, and expenses. A trusted advisor can help you gather the information you need. They can also help you navigate complex financial decisions regarding spousal and child support, insurance, retirement, and Social Security benefits.

As you start this journey, It is important to hire your support team. Seek professional advice. Lean on your friends. It really does take a village.

Hiring a reputable divorce attorney will likely be your first step. Other members of the team may be an accountant and a financial advisor – possibly new relationships that will serve you independently and in your best interest.

A certified therapist is also an important part of the team. Taking care of your mental health during this stressful process will help things go more smoothly for everyone involved. These professionals can work together to make sure that you get what you need.

Once there is a proposed settlement, a Certified Financial Planner™ practitioner can help you evaluate the proposal and its impact on both the short and long term plan for your financial wellbeing. You will need to understand the tradeoffs between taking over certain assets. For example, keeping the house yet forfeiting retirement accounts may offer some stability in the near term but may not be the best long-term plan financially.

Understand Your Cash Flow

Your cash flow is extremely important and you will need to know how much cash is accessible to meet your needs on a month-by-month or day-to-day basis. It’s crucial to fully understand both the value of your assets and their liquidity, to make sure that you get the divorce settlement that’s right for you.

Many of my clients do not have a good sense of what they are spending and where money goes each month. Understanding what your current standard of living costs is incredibly important as you head into divorce negotiations.

Studies have shown that more women lose out after a divorce in terms of income than men, and that these effects are chronic (i.e. very long lasting or permanent) for women, whereas men typically only suffer short term losses.

If you’re allocated high value items in the divorce settlement, but have no access to an adequate source of cash, you may well have to drastically alter your lifestyle. You’ll likely need to adjust your spending regardless of settlement, so start estimating living expenses early and work to establish a realistic budget.

Work out your monthly budget and think about what experiences mean the most to you. Add more funds towards those meaningful experiences by cutting some of the less important expenditures. What brings the most value to your life? Where should you allocate your money to really help you enjoy life and feel good?

Separate Your Heart and Brain

As emotional as this time is, you must separate your heart and your brain. The decisions you make during this time will have far reaching effects and you must make them with a clear head.

Women will tell me one of two things, either they want to just ‘get out’, or they ‘want it all’. Neither option is a good one, and both can leave long lasting wounds.

As hard as it is, the best option is one that is equitable for both parties. Now, equitable doesn’t mean equal, and if you have been out of the workforce for years caring for children or other family members, that will have a bearing in your portion of the marital assets. Similarly, if you are earning less than your spouse, that will also have an impact on your settlement.

Sit back for a moment and take stock. Once the dust has settled, take a look at what you own. Think about what you can afford to keep and what you will need to sell. Cast away those things that you feel hold you back from enjoying your new life to the fullest.

After the Divorce is Final

When the settlement has been finalized, you have the opportunity to take control of your financial life and move forward in a healthy and happy way according to your goals and values.

Here are a few things to remember:

  • Review your portfolio allocation and cash flow plan with your financial planner
  • Meet with an estate planning attorney to draw up a new will, healthcare directive, and power of attorney
  • Update beneficiary designations
  • Update titles on property
  • Review your insurance coverage – health, life, disability, and property/casualty

Move Forward with Confidence

You don’t have to go it alone. A trusted financial advisor can help make the process a little bit easier. If you’re in the process of negotiating a divorce settlement, or have just finished the process, and you feel like you would like some help with the many choices you will need to make, I’d love for you to get in touch.

As a Certified Financial Planner™ professional, I can help you to understand the financial implications of your divorce, and how to make the very best of your new life going forward. Together we can determine the best way for you to get the help you need, and empower you to feel more confident and make the most of this new chapter in your life.

A note from Mary Meadows: This post is the third in a series on navigating life changes, in which I cover important things to consider during different major life events that can all too often upend a financial plan. Read the previous parts here:

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