Divorce is not just an emotional roller-coaster; it also brings with it significant financial implications. The cost of a divorce can average about $15,000 per person nationally, encompassing attorney fees, court costs, and the expenses of hiring experts for real estate, tax, and child support matters. While each divorce is unique and costs can vary greatly based on various factors, understanding and preparing for the potential financial strain is crucial.

With this in mind, it’s wise to consider options like a financial hardship resolution program early on. This program can offer assistance and advice tailored to individual circumstances, helping to alleviate some of the financial burdens during this challenging time. In this article, we’ll walk you through the steps to financially prepare for a divorce and ensure both parties are protected.


Understanding the Potential Costs

  • Attorney Fees: Most people hire attorneys to guide them through the divorce process. Costs vary, but always ask for a clear fee structure upfront. Remember that you’re not just paying for their time in court but also consultations, paperwork, and other associated tasks.
  • Court Costs: This includes filing fees and any other administrative expenses.
  • Expert Consultations: Often, couples will need experts to evaluate assets, especially when real estate or large investments are involved. If there are children, a specialist might be needed to advise on child support arrangements.

Creating a Financial Plan

  • Assess Your Finances: Before the divorce proceedings start, get a clear picture of your financial situation. This includes bank accounts, real estate, debts, investments, and any other assets or liabilities.
  • Separate Joint Accounts: If you have joint bank accounts or credit cards, consider separating them to avoid further complications.
  • Draft a Budget: Post-divorce life may involve changes in lifestyle. Drafting a budget considering your new circumstances can help you navigate the transition without falling into debt.

Protecting Your Assets

  • Change Your Will and Beneficiaries: If your spouse is the beneficiary of your insurance policies or retirement accounts, you may want to revise that.
  • Avoid Making Large Purchases: Until the divorce is finalized, avoid making significant financial decisions or purchases which can complicate the asset division process.
  • Keep Records: Document everything, from marital assets to individual incomes. This will be invaluable during the asset division phase.

Consideration for Children

  • Child Support: Determine a fair amount for child support, keeping the best interests of the children in mind. Often, this will require expert consultation.
  • Education Expenses: Plan for the future education expenses of your children, ensuring both parties contribute fairly.

Seeking Financial Advice

It’s crucial to get guidance tailored to your situation. Financial consultants or a financial hardship resolution program can provide strategies and support to ease the strain. They can help:

  • Reduce Debts: Advising on how to manage and reduce debts.
  • Asset Allocation: Offering suggestions on how to fairly divide assets, considering the long-term implications.
  • Future Planning: Providing strategies for a stable financial future post-divorce.

Emergency Fund

One of the oft-underestimated aspects of divorces is the unexpected financial setbacks they might entail. It’s not just about legal fees or alimony; unforeseen expenses can emerge from anywhere, from relocating to setting up a new household. Creating or fortifying an emergency fund is, thus, non-negotiable. According to a study by Fortune, 40% of Americans wouldn’t be able to cover a $400 unexpected expense. A well-funded safety net can be the cushion that prevents financial freefall during these testing times. Ideally, it should cover 3-6 months of living expenses, ensuring one can focus on the emotional challenges of divorce without monetary distractions.


Credit Score Monitoring

As divorce proceedings unfold, protecting personal financial interests becomes paramount, and your credit score is no exception. A shared mortgage or credit card debt can take a hit if one party defaults or misses payments. Regularly monitoring your credit score ensures any discrepancies are spotted and addressed promptly. Websites like Credit Karma provide free credit score checks. Furthermore, consider separating joint accounts and freezing your credit to prevent fraudulent activities. Staying vigilant and proactive can pave the way for healthier financial stability post-divorce.

Health Insurance

Often woven into marital benefits, health insurance can become a labyrinthine concern during divorces. Understanding shifts in coverage is crucial. If one was under their spouse’s policy, post-divorce scenarios might necessitate a new plan. The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows individuals to continue their existing health insurance for limited periods. However, it can be pricey. Exploring alternatives like the Health Insurance Marketplace or employer-based plans might offer more cost-effective solutions. Ensuring you’re adequately insured can save hefty medical bills in the future.


Divorces don’t always have to culminate in long-drawn courtroom dramas. Mediation, where both parties seek resolutions through a neutral third-party mediator, can be a more harmonious, not to mention cost-effective, avenue. A study from the Journal of Marriage and Family found mediation to be generally less stressful and less expensive than litigation. Avoiding steep attorney fees and court costs can significantly alleviate the financial strain of divorces. Plus, fostering cooperative dialogue might even lead to amicable post-divorce relationships.


Tax Considerations

Taxations and divorces have intricate ties. Filing statuses change, from jointly to individually. Understanding potential deductions or credits, especially regarding child custody or support, is pivotal. For instance, the IRS Publication 504 outlines alimony and child support’s tax implications. While alimony payments aren’t deductible by the payer (as of 2018), child support isn’t taxable income for the recipient. Ensuring compliance and optimizing tax benefits can have significant financial ramifications.

Post-Divorce Financial Goals

Life after divorce is a reset, an opportunity to reevaluate and redefine financial objectives. Clear goals lay the groundwork for future prosperity. Whether it’s building retirement nest eggs, setting aside savings for children’s education, or even dreaming of a new home or venture, having a roadmap is key. Financial planners or counselors can offer guidance, ensuring one’s post-divorce journey is not just about recovering but thriving.


Navigating a divorce is challenging both emotionally and financially. However, with the right preparation and understanding, you can protect both yourself and your soon-to-be ex-spouse from unnecessary financial hardships. By taking proactive steps, consulting with experts, and perhaps seeking assistance from programs tailored to financial hardships, you can ensure a smoother transition for everyone involved.


Remember, while the initial costs might seem daunting, with the right approach, both parties can emerge from a divorce with their finances intact and a clear path towards the future.