In this episode, I’m diving into the important topic of preparing financially for divorce. As a financial coach, I know how significant this transition can be, and I’m here to break it down in a clear, simple, and actionable way. Whether you’re considering divorce, already in the process, or just curious about financial preparation, this episode is for you.
I share insights from my work with clients, including single moms and women who’ve been through a divorce. You’ll hear about real-life stories and challenges that may resonate with you. I’ll guide you through six steps you can take now to feel prepared, confident, and in control of your finances before, during, and after divorce.
If you’re in the midst of divorce or just starting to think about it, I’m here to remind you that you are not alone. With the proper preparation and support, you can move forward confidently and create financial security.
Listen for key insights on financial planning for divorce…
- [01:39] The importance of knowing your numbers pre-divorce
- [06:26] Preparing for legal fees
- [08:24] Considering child costs
- [10:36] Acknowledging financial reality post-divorce
- [12:04] Potential income adjustments
- [13:05] You need a support team
Tune into this episode of Money Files to learn financial steps you should take if you are considering divorce..
Are you ready to start asking for help with your finances? Apply to work with me, and let’s start working towards your financial goals.
If you loved the discussion about financial planning for divorce, check out my episodes, How Having a Team Helped Lisa Payoff $20,000 in Debt , How Saving Money Helped Krissy Spend on Things That Mattered and How Kim Changed Her Finances In One Hour!
Transcript for “Money Matters: Preparing for Divorce with Financial Confidence”
Intro: Hi, and welcome to Money Files. I’m Keina Newell from Wealth Over Now. I work everyday with professional women and solopreneurs to help them get out of financial overwhelm and shame so they can experience more flexibility and ease with their finances. Are you ready to gain confidence and learn to manage your finances intentionally? Tune in and grab financial tips that will help you master the way you think about and manage your finances.
Keina: Hello and welcome back to another episode of Money Files. Today we’re talking about a topic that might feel a little overwhelming, but it is so important and that’s how to prepare financially for divorce. Now, I want to be upfront, I’m not a divorce attorney, but I am a financial coach and I help people create financial stability in the midst of big life changes and divorce, it’s one of the biggest financial transitions you can go through. My goal with this episode is to break down, in a way that feels clear, simple, and actionable so that you can feel prepared and in control and not blindsided if you are someone who’s considering a divorce or maybe you’re going through a divorce or you just want to understand what financial preparation looks like, this episode is going to be for you. I’ll also be sure to tag in my show notes, there are a couple clients that are single moms or women that have been divorced and we have talked about their stories and I’ll make sure that I tag those in my show notes.
So you might listen to my client, Lisa, and feel connected to her. You might listen to my client Kim and feel connected to her, or even listening to my client, Chrissy, and you might feel very connected to her. So let’s go ahead and dive in. So if you are in a position where you are thinking about, I might be getting divorced, or we’ve talked about separating, I want you to know your numbers. Oftentimes what happens in a relationship is that one person might become the default in terms of managing the money. Often women will default to men and men become the ones who they feel like, oh, well I’ve just always relied on my husband because he knows more about money than me. And that generally isn’t even a true statement. It’s just something that you believe because of the society that we live in and how women are spoken to about money versus how men are spoken to about money. So that’s just important to note.
So if you’re in a space, like I said, where you are thinking about getting divorced or separated or just in an exploratory phase, I want you to know your numbers, where they are right now. When you’re facing a divorce, one of the most powerful things you can do is understand your numbers because your numbers are going to be the thing that also bring you leverage. Knowing your numbers can be a space in which is going to help you negotiate later on. So the more clarity you have on where you are financially, the more confident you can be when it comes to advocating for yourself. When it comes to discussions about assets, when it comes to a discussion about support or even division of expenses, knowing your numbers is also going to help you plan for your next steps. So it might help you plan on whether I want to stay in my current home or do I want to move, do I want to work the same job, or do I need to look for a new income?
It’s also going to help you understand your financial baseline and help you be really clear and informed about your decisions. So you want to go through and make a budget. You can grab my spending plan template and you just want to collect data. I want you to know what are your current household expenses, like how much money is coming up in and what’s going out. I want you to know what are the bills? Even if you don’t pay all the bills, be really curious about the bills. I know a lot of people that I worked with sometimes, people manage their money together, sometimes they manage it separately. It’ll be like, okay, well my partner pays the mortgage, but then I take care of the utilities and then I pay whatever expenses I need to pay. Well, if you’re in a place where you are considering divorce, I need you to know all the bills.
I need you to know what’s the mortgage. I need you to know the auto insurance. I need you to know the electricity, I need you to know the water. And so we need to put all of those things into one place so you have a clear picture of what it takes to run your household. I also need you to understand what assets do you have and what’s your debt? So being clear on the value of your home, what’s your retirement account? So your investments, what shared accounts do you have? But knowing this is going to help you be in a place that when you have to have more technical conversations, if you’re going through the divorce process, you are already going to have this information available to you. And then I also want you to think about the hidden cost that you might not be considering. So this is where I think a lot of people can feel like maybe caught off guard, especially when you actually are separated or you have finalized a divorce, is I want you to be thinking about healthcare.
Are you the one who carries the healthcare right now or does your partner carry the healthcare? And if you are covered under your partner’s healthcare, what would it look like if you had to actually take on your own healthcare because that would be a new expense for you at some point in time? Also, just noting for yourself, like what’s going to happen with your retirement accounts? What’s going to happen with your pension? Is that something that you guys would split in the divorce? Being able to look at like your credit and your debt, if you have joint accounts, whose name is it in? And so once again, we’re just collecting information and knowing our numbers beforehand and knowing your numbers in this way is going to help you think about if we separate our households, what might my new situation look like? Just framing for you what are some of the things and some of the crossroads that you might want to explore. So that’s step one.
Step two, I also want you to think about however your finances are managed right now. If you were thinking about going through a divorce process, like I know sometimes people go to mediators, sometimes people go into court, there are different legal fees based off of what you decide to do. So I want you to prepare for these legal fees and prepare for these legal costs that might be coming up. You might start yourself a freedom fund and put some money away and just be thinking about like right now I have an opportunity to set some money aside that I would be able to use in the event that I move forward with a divorce. And I would suggest that you actually consult with an attorney and just be able to have a meeting with this person to ask them like, what do I need to be thinking about as I am preparing to potentially explore divorce?
Once again, these conversations are conversations for you to gather information. So you’re taking care of yourself. You can be preparing yourself both financially. You can be able to prepare yourself mentally for what you’re going to be expecting in terms of legal fees. Also research your options. Maybe you are going to do mediation and collaborative divorce. That can be cheaper, like I said, than maybe going through court. So every situation is different. I’ve worked with different clients, they’ve chosen different routes. If you have friends that are divorced, friends that you trust, it could just be even great to talk to them to say, do you have a divorce attorney that you love? Or can you tell me about your experience from a financial perspective? What questions am I not thinking of that I need to make sure that I think of for myself?
And then step number three, if you have kids, I also want you to be thinking about how am I going to factor in the cost of our children? I think this is one spot where in working with clients, sometimes one partner ends up bearing all of the expenses. And so really thinking about what is going to happen if we’re living in separate households with our kids. Like what does that mean for us financially? If the kids are in sports, who’s paying the sport fees? If the kids have aftercare, who’s paying the aftercare fees? If the kids have a filling at the dentist, who’s paying for the filling? And right now because you’re in a shared household, that might not be a big conversation because you guys just figure it out. And I don’t know how you figure it out and what that process looks like right now. But you would want to start thinking about what would that process look like if you were in separate households?
And so it could be daycare, even thinking about the kids’ clothes, their back to school fees, like these are all things that we want to acknowledge. Do our kids go to private school, not go to private school? And when you’re thinking about your kids, once again thinking about the numbers, we are going to be positioning you to have a conversation as you go through the divorce process, to also think about what does child support look like? What does the financial obligations that both people need to be responsible for to make sure that our kids have a similar experience in both households. And I think sometimes this is where I have seen that this is something that maybe wasn’t considered or wasn’t negotiated. Also, sometimes on the other side when I’m working with clients, I will also talk to clients and be like, you know what, we’re making a budget where we don’t even consider the child support because the child support isn’t something that we can depend on. And so this definitely varies case by case, situation by situation, but still it’s just walking through and understanding this for yourself.
Step number four is I want you to know your numbers after the divorce. So I kind of alluded to this when we were talking about the numbers before the divorce, but in knowing your numbers after the divorce, think about once the divorce is finalized, like what will your financial reality be? And now is the time to really, like even just create another budget where you think about what would my new budget look like? Will my income change? Is it going to be the same or is it going to be different? What will be my fixed expenses? Start thinking about if you had to cover the mortgage on your own, or are you going to go out and rent something? What is the going rate of rent? What is that going to look like for you? And how might that be similar or different to what you’re spending right now?
And then thinking about your debt, like what debt is solely your responsibility? Where does that fit into your plan? Also thinking about what expenses will double that maybe I never considered would double. Maybe you guys split your utilities, your internet, you split groceries, but now those things are going to be all maybe on you. And so what does that look like in your budget now? Your subscription services, your streaming accounts, like the things that you want shared and have, like back in the day when you were in college, you had a roommate, but now you’re going to be paying full price for those things. And then lastly, asking yourself like, how much money do I need to make? How much money do I need to be bringing in? And so this is just going to help you consider, do I need to make a plan to increase my income?
And if I’m making a plan to increase my income, what does that look like? Do I need to adjust my work schedule for my kids? Will that impact my income? And so just asking yourself some of those questions, maybe adjusting your work schedule might also impact if you have kids, it might impact your kids needing to go to aftercare, which maybe that wasn’t a cost that you had before. So just really asking yourself in separate households what will change and what will be my new budget after the divorce. But being able to have your before and have your after, it’s going to help you have better conversations when you’re in court or you’re in mediation and you’re just simply determining next steps for yourself.
And then lastly, and I would recommend this for anyone, is make sure that you have a team. My client, Lisa, she talked about having a team after her divorce. And I think like that is one of the most impactful conversations. I remember when I met her and we were on a consult and she’s like, Keina, I want you on my team as my like financial coach. And she’s like I have other people on my team. But think about like, who are you going to have in your corner to support you? And that is going to make a huge difference in helping you feel financially stable. I would recommend that you look into, do I need an attorney on my team so that way you know exactly what rights you have. Also, do you have like a tax professional or a CPA on your team so you can discuss what are going to be some of the changes and the tax implications of going through a divorce?
You might also want to talk to a certified financial planner and thinking about what are some of the things that I need to think through as I am thinking about whether or not we have to set up or separate our retirement or separate our pensions, or maybe our kids have 529 plans. And so being able to enroll a CFP, certified financial planner, just having a conversation with someone can help you think about things that maybe you didn’t think about in the past. Even myself as a financial coach, I can help you rebuild your budget and really help you feel confident in managing your money moving forward. Like that’s what Lisa and I have done. That’s what I’ve done with a lot of clients, especially that have gone through the transition of just like, I want to make sure that I feel really empowered as a woman to manage my finances on my own.
And then lastly, making sure that you have a support system. Maybe your friends, it may be your therapist, but money isn’t the only thing that’s going to be impacted as you go through a divorce. And so you also want to make sure you have that emotional support as you navigate the ups and downs of where you are. And so I want to let you know that if you are in a place where you are, like I said, financially preparing for a divorce, I just want to let you know that you are going to be okay. I’ve worked with many women. I think one of my favorite types of clients to work with are women that are going through divorce mainly because I get to see them be in a space in which they get to transition from maybe not feeling like they were really powerful when it came to making financial decisions.
And now I get to watch them feel really powerful about how they’re managing their money and just building a new life and thriving in new relationships. So it’s just been some really impactful work that I’ve been able to be a part of and that clients have welcomed me into and I’m forever grateful for those clients. So if you’re in a space where you’re like, Keina, this is me and I am in this space, I would love to be able to talk to you on a consult and support you in whatever way I could. So if you go to Wealthovernow.com, you’ll see that you can apply to work with me there. And then until next week, I will talk to you later and have a great week.
Outro: Thank you so much for listening to Money Files. If you’re ready to take the next step to reach your financial goals, head to www.wealthovernow.com/appointment and let’s get started.
