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Published: Aug 21, 2024 7 min read
Portrait of sad couple signing divorce papers in an office.
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As someone who’s been married and divorced twice, I can say from personal experience that there’s no way around it: For most couples, getting divorced is expensive. In this article, we’ll cover some steps you can take to reduce its financial implications.

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7 Tips to Minimize the Financial Impact of Divorce

1. Familiarize yourself with your finances

The first thing to do is figure out what your marital assets are. This can include not just your joint bank accounts, but also things like the balances on credit card bills, life insurance plans, 401k and other retirement assets, 529s and equity. You may find that there’s more money than you realized.

A good place to start checking your personal finances is getting a copy of your credit report from each of the credit monitoring agencies (TransUnion, Equifax and Experian). Since lenders report to different bureaus, it’s best to get a report from all three. Your report will include your credit accounts and inquiries — from credit cards to auto loans and mortgages — as well as any overdue debt and bankruptcies.

Knowing exactly where your finances stand will make the division of assets that much easier and set you up for your financial future.

2. Be transparent about your money

While it may be tempting to hide some of your money from your ex-spouse, don’t. Just as you wouldn’t want your former partner to do the same to you, it can result in a more contentious divorce process. If it comes out, it will also reduce your credibility with the court, and can significantly increase your legal fees.

3. Make sure your bank accounts are separate

If your savings and checking accounts aren’t already separate, now’s the time to do so. If you’re concerned that your soon-to-be former spouse may not take this well (it happens) it might be a good idea to withdraw half the money into a separate account. Again, make sure you notify your spouse promptly — transparency is key.

4. Beef up your emergency fund

Should you already have a separate savings account, you can use that as your emergency fund. Having some money put away in case of a rainy day may not be in everyone’s reach, but if you can afford it, now would be a good time to create one.

During the divorce process, careful planning and budgeting for your new income can help you keep your standard of living and keep your financial goals in track.

5. Hire professionals

Divorce laws are different in every state, so the people you may need to hire will vary. Even if your breakup is largely amicable, a divorce requires a lot of paperwork which needs to be filled out and filed correctly. Aside from the technicalities, divorce often means divvying up financial assets, such as your home or other marital property, which can provoke a lot of strong emotions. And that’s without even getting into tax implications.

To that end, some couples hire mediators to help them come to agreements in their divorce settlement, either in conjunction to or instead of divorce lawyers.

A relatively newer phenomenon is hiring a divorce coach. According to the American Bar Association Journal, divorce coaches don’t replace attorneys, but rather offer emotional support, financial guidance, and help with filling out paperwork, typically at a lower rate than your divorce attorney.

When there are complicated finances, or a suspicion of one party being less than completely honest, it might behoove you to hire a forensic accountant firm or a certified divorce financial analyst — but this should be a last resort, as it can get very expensive very quickly.

6. Agree on child support and alimony

Agreeing on child and spousal support (and child custody) can often be one of the touchiest points in a divorce. When you’re discussing this, make sure to take extras — such as healthcare, child care costs, camp, sports gear or fees, and even long-term goals like college — into account.

If you have kids, it’s also a good idea for both you and your ex to have life insurance policies in place, especially if there are child support payments or alimony involved. (Speaking of which, make sure to change your beneficiary on your existing policy and retirement accounts, if it’s currently your soon-to-be-ex).

7. Go to court — as a last resort

In the best situation, you and your ex-spouse part on the best of terms, with your post-divorce life finding you if not friends, at least friendly. The sad reality is that this sunny scenario is rare. After all, couples usually divorce when there’s no hope of a reconciliation, so it shouldn’t come as a surprise if the process is difficult and painful, which can lead to a lot of anger.

However, if there’s any way to avoid taking each other to court, with family law attorneys battling it out at trial, try and go for that option. Our research found that contested and litigated cases can take a lot longer to resolve than mediated divorces (and cost a whole lot more as well). Further, mediation can allow both parties to come up with solutions that work for both of them, whereas a judge can often apply a one-size-fits-all approach.

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Summary of How to Minimize the Financial Impact of Divorce

Just as everybody’s relationship is different, everybody’s divorce experience will be different. But by keeping as level a head as you can manage, and sticking to some simple tips, you can make yours at least somewhat easier — and keep your finances in order.

  • Familiarize yourself with your finances
  • Be transparent about your money
  • Make sure your bank accounts are separate
  • Beef up your emergency fund
  • Hire professionals
  • Agree on child support and alimony
  • Going to court should be a last resort