Divorce and Financial Independence

Divorce can be daunting, especially when it comes to finances. If you're the lesser or non-moneyed spouse, it may feel particularly terrifying—especially when your partner implies that what they earned belongs to them alone and nothing is yours. If you’ve found yourself in this situation, you’re not alone. Many of us fear what comes next, especially when it feels like we don’t have the full picture.

So, today, let's talk about how you can start to lay the foundation for your financial independence through your divorce and beyond. We'll take a broad look at key areas to focus on so that you don’t feel lost or overwhelmed. While it's natural to want to stick your head in the sand and ignore some of the difficult financial realities, the best way forward is to educate yourself and stay proactive.

Step 1: Gathering the Information

At the start of your divorce, you’ll be required to fill out a financial affidavit or net worth statement, depending on your state. This process involves listing:

• What you earn: This includes both your and your spouse's income throughout the marriage.
• What you own: This includes your house, cars, investments, bank accounts, etc.
• What you owe: Any debts, whether you were aware of them or not.
• What you need: You may need to get creative here, but begin by building a new budget based on what you need to live.

Even if you don’t have full access to all of the information, legally, your spouse is required to hand over this information. Start by gathering whatever you can: tax returns from the last three years, bank statements, or anything that sheds light on your financial picture.

Step 2: Hiring the Right Team

While you can certainly manage your own finances, having an objective professional can be invaluable—especially if you’re emotionally triggered during the divorce process. If you have a trusted CPA, that’s a good place to start. However, hiring a Certified Divorce Financial Analyst (CDFA) can be an even better choice. These professionals specialize in the financial complexities of divorce and can help you evaluate options for negotiating a fair settlement.

They can also help you forecast long-term financial impacts, such as whether the settlement will sustain you in the future, how to manage child and spousal support, and whether you can keep the family home.

Step 3: Budgeting and Planning

If you're feeling overwhelmed by how to start budgeting post-divorce, you're not alone. When I went through my divorce, I had to learn budgeting from scratch. The first thing you need to do is understand what you’ll need to cover living expenses, bills, and, most importantly, how much income you need to generate to meet those needs.

It’s not always about living on less. Sometimes, it's about realizing that the small, unconscious spending habits add up. For example, one of my clients would grab a Starbucks coffee every single day, and when we calculated how much she spent, she realized she could save a significant amount just by cutting back. It's about being conscious of where your money goes and making decisions accordingly.

Step 4: Investing in Yourself

This part is essential. Divorce is hard, but it’s also an opportunity to rebuild and redefine who you are. Many people find themselves needing to go back to school, get additional training, or revamp their careers. Alimony often serves as a cushion during this transition, giving you time to adapt, retrain, or establish a new work-life balance.

It’s not easy, but if I can do it, so can you. I was in a position where I was living off commission and had little financial security when I got divorced. I had no alimony and little child support. But I knew I needed to take responsibility for my financial future, and so I invested in myself, learned new skills, and rebuilt my career.

Step 5: Navigating Post-Divorce Finances

Once your divorce is finalized, you’ll need to adjust to your new financial situation. This means setting a new budget, deciding whether to go back to work, find a side hustle, or completely pivot to a new career.

It’s also essential to learn how to embrace your financial situation. This isn’t about feeling defeated or unfairly treated; it’s about accepting that this is your new reality and deciding how you will move forward from it.

One of the most important things you can do is take action and move forward with the mindset that this is for me. This situation is giving you the opportunity to rebuild, to step into your own financial confidence, and to create a life that is uniquely yours.

Final Thoughts

Divorce isn’t easy, but navigating your finances after divorce doesn’t have to be a roadblock to your success. It requires taking proactive steps, building your team, and staying open to change. If you’re able to see the silver lining and approach this process with a mindset of growth and resilience, you’ll come out the other side stronger and more financially independent.

Financial reality is just beginning. Give yourself permission to take a step back and process everything. If you need time to breathe or get a clearer picture, take it. This isn’t just about legal decisions—it’s about laying the foundation for your financial future.

Honor Your Financial Needs: Even if you feel confident about your decision, the uncertainty around finances can stir up feelings of anxiety or fear. It’s normal to feel overwhelmed. Surround yourself with trusted financial advisors or a divorce coach who can guide you through these emotional and practical financial waters. (Want help getting control of your financial future? Our Reclaim Your Mind Mini Course can teach you how to take back your mindset during this challenging time.)

Set Clear Financial Boundaries: Your spouse may try to sway financial decisions or pull you into disputes. It’s important to set firm boundaries about what you’re willing to discuss and what you’re not. Be clear on your goals and needs moving forward. (Need help with this? Check out our Boundary Bootcamp to set strong financial boundaries that work for you.)

Prepare for the Financial Journey Ahead: The divorce process doesn’t end with the settlement. There are still plenty of financial decisions to make, from how you’ll handle the division of assets to your budget moving forward. Now is the time to focus on getting your financial affairs in order for the future, even if it feels like a big undertaking. (Find ongoing support and insights in our High Conflict Divorce Support Group to help you navigate the complexities of post-divorce finances.)

Taking control of your financial future after a divorce can feel daunting, but it’s the first step towards creating a new, empowered life. With the right planning, guidance, and support, you can move forward with confidence and clarity.

Listen to the Podcast Episode where Karen discusses further