How Do I Manage My Finances After Divorce?
Financial guidance for managing money after divorce
Taking control of your finances after divorce starts with defining your core values, aka the principles you prioritize above all others. It’s the first step to feeling more comfortable and confident in making immediate financial decisions independently (especially if you’re used to your partner managing the money).
Write, revise, or remind yourself of your top three-to-five core values — there are no wrong answers. Some examples: adventure, balance, compassion, the environment, family, growth, happiness, integrity, justice, responsibility, and success. With divorce finances in mind, you might ask yourself: “If I made a decision that required me to stretch even more out of my comfort zone or live with less, it would be worth it because of [this value].” Use your core values to validate your future financial decisions instead of letting fear or frustration influence your finances after divorce.
Now, get a clear idea of your personal divorce finances. List all the money coming in, what’s going out, and what must be saved for urgent goals (like purchasing a house again or supporting your kids’ education). Then, use those numbers to create a post-divorce budget that reflects your current income only — just to be cautious. It’s likely you’ll have to make tradeoffs, but this is where your core values can help you make more intentional financial decisions. Never created a budget before? Dive in anyway — just because you’ve never done something doesn’t mean you’re bad at it. Still need support? An Ellevest financial planner is here for you.
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Boost your confidence in making immediate financial decisions by writing or revising your core values to reflect your independence.
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Assess how much you have coming in, what’s going out, and what must be saved for urgent goals (like purchasing a house again or supporting your kids’ education).
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Create a post-divorce budget that relies on your own current income and is guided by your core values. If your divorce finances still make you feel SOS, an Ellevest financial planner can help.
Financial guidance for managing money after divorce
Taking control of your finances after divorce starts with defining your core values, aka the principles you prioritize above all others. It’s the first step to feeling more comfortable and confident in making immediate financial decisions independently (especially if you’re used to your partner managing the money).
Write, revise, or remind yourself of your top three-to-five core values — there are no wrong answers. Some examples: adventure, balance, compassion, the environment, family, growth, happiness, integrity, justice, responsibility, and success. With divorce finances in mind, you might ask yourself: “If I made a decision that required me to stretch even more out of my comfort zone or live with less, it would be worth it because of [this value].” Use your core values to validate your future financial decisions instead of letting fear or frustration influence your finances after divorce.
Now, get a clear idea of your personal divorce finances. List all the money coming in, what’s going out, and what must be saved for urgent goals (like purchasing a house again or supporting your kids’ education). Then, use those numbers to create a post-divorce budget that reflects your current income only — just to be cautious. It’s likely you’ll have to make tradeoffs, but this is where your core values can help you make more intentional financial decisions. Never created a budget before? Dive in anyway — just because you’ve never done something doesn’t mean you’re bad at it. Still need support? An Ellevest financial planner is here for you.
Book a complimentary 15-minute call with a financial planner
Research shows that women’s household income falls almost twice as much as men’s post-split. And divorce can affect women’s money in a lot of other ways, too. Now’s the time to book a free 15-minute call with a financial planner that’s personalized to your unique circumstances.
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FAQS
We recommend getting familiar with the 50/20/30 budgeting rule and using it as more of a guideline for managing your finances after divorce. For example, you might need to adjust it to a 60/30/10 budget if things are tight, and that’s perfectly fine. The important bit is that you’re allocating money to your needs, your wants, and “Future You” every month, however you can afford it. Plus, when you know you have a certain amount to spend on the fun stuff, it takes some stress off your divorce finances.
Here’s how to cut back to an essentials-only budget. You’ll be tasked with putting each of your expenses in a bucket — essential, cut back, pause, or cancel — and following a spending plan. If you need even more wiggle room, explore your options for negotiating fixed costs, pausing contributions to retirement or investment accounts, requesting forbearance on certain debts, or signing up for government benefits if you qualify for them. You could also consider ways to bump up your income: negotiate a raise, monetize a hobby, or even gear up to rejoin the workforce.
That’s a scary place to be in, but it doesn’t have to be hopeless. Try taking these four steps to get your divorce finances back on track. It’s important to point out that dipping into retirement savings is the last step, because it should only be your last resort. If you take money out of that account now, it can be really hard to catch up later. Better strategies, in our view, are to take advantage of temporary assistance or even go into short-term debt in order to avoid the need for longer-term assistance in retirement one day.