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Divorce & finances: reducing stress, saving money

Divorce takes a toll on people emotionally and can be financially devastating. According to a 2018 study by Nolo, a typical divorce costs approximately $15,500, primarily due to legal fees; the average divorce attorney charges $250 an hour.

Taking a step back, one of the major ingredients to a successful marriage is to be on the same page with your partner about finances. Often finances are not on the forefront of most couples’ minds when saying “I do.” Not surprisingly, financial issues are a leading cause of divorce according to

It is critical for couples to be on the same page about finances while running a household budget as it can go hand and hand with stress. Being late or falling behind on monthly bills (rent, mortgage, utilities) can cause anxiety and tension between couples. More importantly, in most marriages, couples find that they are co-dependent on each other’s income in order to run the household smoothly. Thus, divorce could easily be followed by a financial disaster – most commonly bankruptcy.

A 2015 blog from Forbes via My Advocate Center says, “some people are pushed into bankruptcy by their former spouse. Let’s say they owned a house together but they either don’t want to sell it (because they want the children to keep living there) or they can’t sell it because it’s upside down. One of them agrees to pay the mortgage; it might be the spouse who lives there, or it might be the ex who is supporting him or her. But the mortgage doesn’t get paid. Maybe that spouse eventually files for bankruptcy, and the other one ends up having to file in order to keep the house and catch up on payments, or to discharge their responsibility for the remaining loan.”

If you are currently going through a divorce, here are some financial strategies you can use to stay afloat:

  1. Do not make decisions based solely on advice from peers! As an article from Nerd Wallet states, it is usually a bad idea to only seek advice from friends, family, or even online resources. They mean well, but may not be 100% accurate. Remember that divorce laws differ from state-to-state; therefore, there isn’t a one-size-fits-all solution. You should always consult with a licensed attorney in your state.
  2. Build a budget and project future expenses! One of the critical steps for success is to build and track your daily, monthly, and annual expenses. Usually when couples divorce, they are blindsided by unexpected and hefty expenses. As a result, people are basically pushed into bankruptcy. Avoid this by projecting a future budget with expenses and debts. For example, if you keep the house, can you pay the full mortgage? Or if you make more income and are not the custodial parent, how much will your alimony and child support be? As Nerd Wallet states, this will help build a budget post-divorce and it is crucial for your attorney and, eventually, the judge in deciding how to split assets and debts and whether to award spousal or child support.
  3. Know whose name is attached to what! Who is on the title of your car? Are there joint credit card accounts? Do you have a joint mortgage? It is critical to gather up ALL paperwork and make copies. Listed below are some documents you will want to gather:
    • Income tax returns
    • Paycheck stubs and W-2 forms
    • Financial records including bank statements and loan information
    • Investment account statements
    • Employment records
    • Pension information
    • Retirement savings accounts
    • Social security statements
    • Children’s bank accounts
    • Debt records including credit card and loan statements
    • Will and trust agreements
  4. Tackle the technical administrative tasks! provides a basic list of things to do to secure your personal finance picture when you are divorcing. Some of these things can be done right away, while others have to wait until the divorce is final. Do what you can now rather than trying to do it all after the dust settles:
    • Close joint credit card accounts.
    • Remove your spouse’s name from bank accounts, credit cards and employer records.
    • Update your marital status and address on tax records, post office records, professional licenses, property titles, utility bills and health insurance.
    • Open a new bank account and credit card in your name.
    • Use a personal finance app to track child support, alimony, medical expenses and other expenses related to the divorce.
    • Establish sound credit in your name if you have not done so. 
  5. Be conservative while making large financial decisions! Nerd Wallet states that the divorce proceedings will determine all of your major financial changes. It might be tempting to get a jump on tasks like adjusting your life insurance beneficiaries — but it’s best to wait. Therefore, you should ALWAYS consult with your attorney if you are unsure about anything.
  6. Now is the time to be very frugal in spending. Remember that a divorce can be quite costly. In fact, many couples do not prepare and find themselves depending on credit cards to take care of the hefty expenses (attorney fees and court costs). While it may not be possible to completely avoid using credit cards, it is wise to maximize the amount of money you save on a regular basis to offset these costs.
  7. Try to work as a team, even if it is tough. While you want to try to work cordially with your spouse to make sure your divorce goes smoothly, sometimes this is easier said than done. If you and your spouse can agree to untangle your estates, the overall cost for divorce will be less. However, most often resentment between spouses creates tension and complicates matters. Nerd Wallet suggests limiting confrontation by gathering the important paperwork before filing. If your spouse fights you every step of the way, consult with your attorney about options.

Free and low cost resources

Obviously, lawyers are expensive, and not everyone can afford a lawyer. Here are some low- to no-cost resources to check into:

  • Pro-Bono Legal Representation: Free resources are available to those who meet income requirements. provides referrals to local legal aid and public interest law offices, basic information about legal rights, court forms and information, self-help information, links to social service agencies and more.
  • Low Cost Legal Representation: If your income disqualifies you for pro-bono help, check with your area bar association’s lawyer referral service to find a lawyer who can take your case for a reduced fee. You can find the bar association in your area online.

Author Ray McCoy is an LSS Financial Counselor.