Divorce often means starting fresh with your finances. You might be working with a single income, taking on new expenses, or figuring out how to manage money on your own. It’s a big shift, but there are steps you can take to get organized and feel more in control.
A few simple changes—like adjusting your budget or updating legal documents—can help you build a more stable financial life moving forward.
Adjusting to Your New Financial Reality
After divorce, your financial picture may look different than it used to. To start planning, take stock of what you earn, what you owe, and what you spend.
Look at Your Income
List all sources of income you receive on a regular basis. This could include wages from a job, child support, alimony, or benefits. Understanding what you bring in each month will help you make realistic spending decisions.
Review Your Expenses
Next, write down everything you spend money on. Start with fixed costs like housing, utilities, transportation, insurance, and any regular loan payments. Then add flexible costs, like groceries, gas, and personal spending.
Don’t forget any one-time or short-term expenses that come with divorce, like legal fees, moving costs, or setting up a new household. These should be part of your financial planning, even if they don’t repeat monthly.
Building a Budget That Reflects Your Current Life
After a divorce, your financial responsibilities may change. Creating a budget based on your current income and expenses can help you stay organized and avoid surprises.
Some people use a zero-based budget, which means planning how every dollar will be used each month. Others prefer the 50/30/20 method, which divides income into three broad categories:
- 50% for needs like rent, food, and transportation
- 30% for extras like entertainment or eating out
- 20% for savings or debt payments
There’s no one “right” way to budget. The best approach is one that fits your life and helps you manage money in a way that feels clear and doable.
It’s normal for expenses or income to shift over time. Checking in on your budget regularly may help you stay on track and adjust when needed.
Updating Key Documents
After a divorce, it’s a good idea to review any legal or financial documents that list your ex-spouse. Making updates can help avoid confusion or problems down the road.
Review Beneficiary Information
Check the beneficiaries listed on your life insurance, retirement accounts, and other financial accounts. If your ex-spouse is still named, you may want to update those designations. This helps ensure that your assets go to the right people in the future.
Revisit Estate Planning Documents
Divorce often calls for changes to your will, power of attorney, and healthcare directives. These documents may still name your ex-spouse in important roles, such as decision-maker or guardian. An attorney can help you update them to reflect your current wishes.
Setting Short- and Long-Term Financial Goals
Setting a few clear goals can help you feel more focused and in control during a time of change. These goals don’t have to be big or complex—they just need to reflect what matters most to you right now.
Short-Term Priorities
Many people start by focusing on short-term stability. That might include:
- Saving for an emergency fund to cover a few months of essential expenses
- Paying off high-interest debts
- Finding a stable, affordable place to live
Even small steps toward these goals can make a difference over time.
Looking Ahead
Once your day-to-day needs feel more manageable, you might start thinking about longer-term goals. These could include:
- Setting aside money for retirement
- Creating a plan for your children’s education
- Saving for a future home
Everyone’s goals are different, and they may shift as your life changes. What matters most is that your plan feels realistic and fits your current needs.
Finding the Right Support
Getting help from a qualified professional can make it easier to sort through financial decisions after a divorce. Two types of experts you may want to consider are Certified Financial Planners and Certified Divorce Financial Analysts.
Certified Divorce Financial Analyst (CDFA)
A CDFA helps people understand the financial side of divorce. They can assist with questions about dividing assets, handling taxes, or planning for long-term needs based on your new financial situation. This type of support can be especially helpful during the divorce process itself.
Certified Financial Planner (CFP)
A CFP can help you plan for what comes next. They work with people on a wide range of financial topics, like budgeting, saving for retirement, or setting future goals. If you’re looking to build a new financial plan after divorce, a CFP may be a helpful resource.
Wrapping Up
Divorce can bring a lot of financial changes, but it also offers a chance to start fresh. By understanding your new expenses, setting clear goals, and getting the right support, you can take steady steps toward a more stable financial future.
