Divorcing your spouse is not a cheap endeavor. 

Data from Martindale Nolo Research shows that in the United States, the average cost of divorce is approximately $15,500. Aside from attorney fees, which are often the most expensive part of the divorce process, splitting couples also need to worry about court fees, childcare costs, and asset division. And once the legal procedure is over, newly divorced adults will have to figure out how to live on an individual income.

Setting aside time to sort out your finances can save you a lot of stress as you navigate the divorce process. To help you keep the cost of divorce at a minimum, we’ve listed the things you need to know about managing your finances while preparing for a divorce.


Gather financial records

To gain a clearer picture of your current financial situation, start organizing your financial records, including any documents related to marital accounts. The documents you need to gather include bank statements, investment account statements, retirement account information, social security statements, employment information, tax returns, and documents related to existing debt.


Do an asset inventory

Take stock of what you have by making a list of marital and non-marital assets and liabilities.

Marital assets and liabilities are assets and debts that you and your spouse had accumulated during your marriage. This includes properties (real estate, valuables, and vehicles), cash on hand, savings, investments, and debt. To prepare for the process of asset division, you will be required to disclose these assets and liabilities during the divorce proceedings.

On the other hand, non-marital assets and liabilities are assets and debts you acquired before your marriage. These assets and debts will not be involved in the process of asset division and will remain your responsibility after divorce.

Aside from ensuring an efficient asset division process, tracking all marital and non-marital assets and liabilities can help you build a more accurate budget after divorce.


Estimate future expenses

With your assets and debts listed down, you now have a clearer picture of your individual financial health. The next step is to determine what your day-to-day expenses might look like post-divorce. As ‘How to Survive and Thrive Financially After a Divorce’ by Linda Matthew explains, you can do this by filling out an Income and Expense Form. On this form, list down all of your regular household expenses, including taxes and savings. Then, create a separate column, and list down your estimates for household expenses once you’re on your own. This then allows you to estimate how much you’ll need to earn to sustain your lifestyle.

cost of divorce

Adjust your budget

Post-divorce, you’ll be forced to depend on your individual income. Take a look at how much you now make, then determine how to adjust your household spending to fit that number. Fortunately, being divorced means having one less person to spend money on. You also have a bigger say in where your money goes. Take advantage of this freedom and adjust your budget according to your personal financial goals, such as saving and investing.

Make sure the goals you set can be realistically achieved given what you make. A guide to balancing budgets by AskMoney recommends basing your budget around your lowest month’s income. This way, you won’t have to lower your spending if you make less than you anticipated. Additionally, if your income grows bigger than your estimate, you’ll have more money to save or invest.


Separate your marital accounts

During your marriage, it’s likely that you shared credit cards and bank accounts with your spouse. To move forward financially, you need to start your own accounts.

Settle any existing joint credit card balances and close accounts immediately. According to US News’ report on credit card debts post-divorce, any debt that is in your name is contractually your responsibility, regardless of whether these debts come from you or from credit card co-owners or authorized users. If you don’t close joint credit cards as soon as possible, your former spouse will still have the power to damage your credit score. It’s also a good idea to start building credit under your name.

If you and your spouse are on amicable terms, you can also visit your bank together to close joint accounts. Otherwise, you’ll have to wait for the divorce settlement to do so. Then, open a new bank account for yourself, if you haven’t already done so. This gives you a safe place to store and build your savings as an individual. Remember to update your direct deposit information to ensure that your paychecks will be deposited into your new personal bank account.


Start investing

Married couples, if both parties were employed, usually had the advantage of having at least two income streams. When one spouse’s income took a hit, the other spouse’s income helped to offset any losses. Post-divorce, you will only have your own income to rely on. Protect yourself in times of crisis by diversifying your income streams. Invest some of your money into safe equities, such as stocks, bonds, mutual funds, or REITs.

Getting a divorce is rarely easy. However, by staying ahead of things like asset division, expenses, budgets, and investment, you can save yourself from further stress, financial problems, and keep your cost of divorce manageable.

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P.S. Want more tools and resources to stay positive during a divorce? Download my Free Divorce Survive & Thrive Kit below!
The Radically Positive Way
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Gabrielle Hartley with Elena Brower
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DISCLAIMER: The commentary, advice, and opinions from Gabrielle Hartley are for informational purposes only and not for the purpose of providing legal advice or mental health services. You should contact an attorney and/or mental health professional in your state to obtain advice with respect to any particular issue or problem.


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