Navigating Divorce: Financial Steps to Reduce Stress
Divorce can feel overwhelming—emotionally and financially. While time helps, there are practical actions you can take early to reduce uncertainty and protect your long-term stability. Below are concrete steps to consider once you know divorce is moving forward.
Don’t Go Through It Solo
Divorce decisions often happen during a period of high stress. That’s exactly when it becomes harder to separate emotion from strategy. Getting professional support isn’t about “winning” or being difficult—it’s about treating the financial side of divorce like a major life decision with long-term consequences for you (and often your children).
Consider a CDFA® (Certified Divorce Financial Analyst)
A CDFA® is trained specifically to evaluate the financial outcome of divorce decisions. They help you understand tradeoffs across topics like taxes, retirement accounts, property division, and the long-term impact of child and spousal support. A CDFA® can support you whether you work through attorneys, mediation, or a more collaborative process.
If you want divorce-focused planning support, FMD Wealth Advisors can help you model settlement options and organize the financial decisions that follow.
Speak With a Divorce Attorney Early
Legal guidance matters—especially around protecting assets, establishing temporary agreements, and making sure documents and deadlines are handled correctly.
To find the right attorney, ask for referrals from people you trust (friends, a CPA, an estate attorney, or a financial professional). It’s often worth interviewing more than one. Your goal is to find someone you’re comfortable working with and who communicates clearly. The highest-priced option isn’t always the best fit.
Credit Still Matters
If your name is on a debt—whether it’s a credit card, loan, or line of credit—missed payments can affect you, even during divorce. In many cases, obligations that either spouse participates in can still impact both parties until they’re formally separated and refinanced, transferred, or paid off. Keep payments current while you and your attorney determine the best path forward.
Deal With Joint Accounts Carefully
Joint accounts are sensitive because either person may have access. Ask your attorney whether it makes sense to restrict activity on joint accounts. This is difficult emotionally, but it may be necessary to prevent unintended withdrawals and to create structure while the divorce process unfolds.
In some situations, a bank can require withdrawals to be approved by both parties. That allows each person access to agreed-upon funds while reducing the risk of unilateral actions.
Even if you believe your spouse would never drain a joint account, it may still be wise to plan conservatively. If one spouse does take more than their share, attorneys often address that later through adjustments during the division process. You may also be advised to open an individual account for your portion of funds and to receive future income.
Build a Clear Budget
If you don’t have a detailed picture of your household spending, now is the time. A budget helps you understand what it truly costs to run your life—housing, childcare, insurance, groceries, subscriptions, debt payments, and everything else.
This becomes especially important when determining whether child support or spousal support may be needed and what amount is realistic. Try to keep spending steady and avoid “revenge spending.” It rarely helps and can complicate negotiations.
Create a Financial Roadmap
Divorce changes the plan—but it doesn’t eliminate your goals. You still need a roadmap for retirement, savings, and your next chapter. A written plan can help you evaluate tradeoffs and stay on track year after year.
A financial plan can also bring stability during a period when everything feels uncertain. Knowing where you stand—and what steps come next—can reduce anxiety and help you make better decisions.
Key Financial Issues People Often Miss
Below are areas that frequently create problems during negotiations or after the divorce is finalized:
Asking to keep the home when you can’t afford the ongoing costs
Confusing taxable vs. non-taxable assets when dividing property
Understanding what a QDRO (Qualified Domestic Relations Order) does and when it’s required
Protecting spousal and child support using life insurance, when appropriate
Making isolated decisions instead of looking at how each decision affects everything else
Assuming a 50/50 split automatically equals a fair outcome
Overlooking the income tax cost basis of property
Not having a clear plan for how debt will be divided and managed
In summary: don’t rush. Some estimates put the average divorce timeline at approximately one year. People often get impatient and accept compromises they later regret. Also, keep in mind that less than 10% of divorces go to trial.
Expect a Lot of Documentation
You may need to provide “paperwork, paperwork, and more paperwork.” Many divorces require a detailed financial affidavit listing assets, liabilities, income, and spending. Some questions can feel extremely granular, but the process is designed to create a complete financial picture. It can be tedious—but it’s often necessary.
The Months After Divorce: Resetting Your Financial Life
Even once the documents are signed, the financial work isn’t automatically over. The period after divorce is a transition—and it’s a good time to rebuild structure, confidence, and clarity.
Keep Calm and Move Forward
Divorce can change your standard of living, sometimes dramatically. For example, how would you handle a potential 35% decrease in lifestyle? The goal isn’t to panic—it’s to plan. The sooner you understand the new reality, the sooner you can stabilize and make intentional choices.
Know Your Spending and Your Net Worth
A financial plan can help you quickly understand:
How much you own vs. owe
How much you spend vs. save
Whether your current lifestyle is sustainable
What adjustments will have the biggest impact
A plan can also help answer common questions like:
When should I take Social Security? When can I afford to retire? Can I travel the way I want to later? Am I spending too much?
If you already have an advisor, start by checking in with them. If you’re looking for divorce-focused planning support, FMD Wealth Advisors can help you build a post-divorce roadmap and reduce uncertainty as you move forward.
Update Beneficiaries and Estate Documents
After divorce, beneficiary designations often need immediate attention. If your former spouse is still listed on a life insurance policy, retirement account, or investment account, you may want to update it right away (where allowed).
You may also want to revisit your estate planning documents—such as powers of attorney and healthcare directives—and consider whether a trust makes sense for your situation. If you previously relied on your spouse’s health coverage, you’ll also want to review health insurance and long-term care planning.
If you are entitled to alimony or child support, talk with your attorney about whether life insurance should be used to support those obligations. Often, this is addressed prior to the final divorce decree. In some cases, the receiving spouse may seek protections such as being named an irrevocable beneficiary, being listed as owner, or paying premiums directly to reduce lapse risk.
Review Insurance Coverage
Divorce is a natural trigger to revisit auto, homeowners, and liability coverage. With fewer assets, you may choose different deductibles or liability limits.
Also consider an umbrella policy to protect against lawsuits that exceed auto or homeowners coverage. Umbrella coverage can be relatively inexpensive and may prevent serious financial harm. If you have children, it may also be time to revisit life insurance and education funding needs.
Monitor and Rebuild Credit
Get a baseline credit report and begin rebuilding where needed. Resources like CreditKarma.com can help you monitor changes and spot issues.
Consider closing joint accounts when appropriate, and confirm that mortgages and titles are updated as required. If you change your name, remember to notify Social Security and update your records consistently.
Get Organized
Set up a system—digital or physical—for statements, legal paperwork, tax records, and insurance documents. The longer you wait, the harder it can become.
Tools can help you track spending and stay organized. At minimum, review your bank statements monthly. Check whether spending is consistent, estimate average expenses, and look for places to cut costs. Keep an eye on credit card balances and avoid late fees.
Build the Right Team
Many people rethink their financial relationships after a major life event. Some research suggests approximately 70% of women replace their financial advisors after a death or divorce. That doesn’t mean you must change—but it does mean you should evaluate whether your current team truly supports your best interests.
At minimum, consider having a team that can cover:
A CPA (or tax professional)
An estate attorney
A financial planner/advisor
Interview them. Ask direct questions:
What is your investment philosophy? How do you protect clients? What are your fees? Is planning included? How often will we meet?
The right support can make this next chapter feel less intimidating—and a lot more manageable.
A Final Note
As hard as it feels now, divorce can also become a turning point. Over time, you’ll have a clearer picture of your finances—and more control over your future. Stay focused, take care of your health, and keep moving forward. There is a point when things start to feel lighter again.
Disclosures: FMD Wealth Advisors LLC (“FMD Wealth Advisors”) is a Registered Investment Adviser.
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