We feel the effect of divorce ripple through all aspects of life. The holiday season is no exception.  Adding insult to injury, the holiday changes are emotionally and financially challenging. Our budget for gifts is dramatically downsized. We awkwardly show up solo at the annual Christmas party.  And, we cringe when family members ask us painful questions about custody arrangements. Financial planning during divorce is one of the hardest things for many to navigate.

The joy of the Holidays slowly returns as a new path of normality is forged. However, unlike many of the other changes caused by divorce that work themselves out naturally, changes in personal finances should be addressed totally differently. You can’t afford to close your eyes and simply hope for the best when it comes to financial planning after divorce. Your action plan for finances needs special attention post-divorce.

The “normal” money cycle

As a single mom, financial planning after divorce should be at the top of your priority list.

It’s normal to be broke when you’re young, and slowly build your nest egg over decades as you pay off debt and your income slowly increases. That’s the normal life-cycle of money.  Finally, in retirement, you enjoy the fruits of labor as you live off your investments.  

But, if divorce happens, a natural disaster of epic proportion shreds that “normal” cycle.  It makes “normal” look so very desirable, yet out of reach.  

Divorce is likely the biggest financial shift you will ever experience.


Money trends immediately following divorce

Marital assets are divided in a divorce.  Then, you subtract the attorney fees and other miscellaneous divorce-related fees (like paying a security deposit and furnishing a new apartment).

Did you have to sell your home? Or, divide up a retirement account?  You know from looking at your asset list in the divorce process that you now have a lot less to your name. Perhaps your net worth dropped by 50% or more.  


Increased living expenses post-divorce

How was your budget in marriage? Was there plenty of money to go around? Or did you feel the strain of making payments on time?  

Post-divorce, you have mostly all the same expenses as you did before (except your Ex’s pricey hobby).  You still have to pay for food, shelter, utilities, children’s expenses, clothing, etc. Yet, you paying for it all on only one income now.  Economies of scale are not working to your benefit here.  

While your living expenses may actually be less than what you paid while married (if you have downsized), it feels like living is more expensive now.  Because you are paddling the canoe by yourself. 

Mothers, money, and divorce

Mothers continue to be the primary caregiver following the majority of divorces.  This entails more time and energy focused on caring for the kids and less on her career.  As a result, divorced women tend to earn less and save less than their ex-husband.  

In summary, we are looking at net worth chopped in half (or less), a proportionately higher cost of living, and a lower earning potential for women post-divorce. Ouch.

As a single mom, financial planning after divorce should be at the top of your priority list.

Statistics and money post-divorce

Research shows that divorced families are 7% more likely to be “at-risk” for retirement.  The average net financial wealth of traditional family is $132,000, compared to $101,000 of a divorced family.  

Considering that the Great Recession increased the same “at-risk” for retirement scale by 9% (versus 7% for divorce), the increased risk in for retirement readiness post-divorce is alarming.

The numbers get worse for the unlucky who have been divorced multiple times. If you have been divorced twice, you are looking at an average of 82% lower wealth than those who stayed married. 

Women versus men and money post-divorce

Women tend to face greater financial difficulty post-divorce than men.  According to one study, divorced women lose an average of $161,000 in non-housing assets. This same study shows that divorced women retain 35-43% non-housing, household net assets.

The effects of age on post-divorce finances

Research shows that financial recovery is harder for those who are close to retirement.  In general, those who divorce in the 50s have less wealth those who divorce in their 30s.  Essentially, they have less time prior to retirement to recover from their net worth getting axed in half from divorce.  

Are you beginning to see why financial planning after divorce is so key?

The action plan: how to achieve success with financial planning after divorce

Enough of the depressing statistics!    

Now that we know divorce has a serious negative impact on personal finances and retirement planning, particularly for women and those who divorce in the 50s, let’s see what can be done about it.

Let’s construct a new, post-divorce financial action plan that empowers you for financial success. 


1. Create a budget

First, Look at your pay stub and bank statements to assess how much money you have coming in each month.

Second, categorize all your expenses.  Estimate how much your spending on food each month, for example.  Make sure you are accounting for all possible expense categories.

Third, ensure that your income exceeds your expenses


2. Create a new financial plan

Take a fresh look at your retirement accounts, investments, life insurance, real estate.  Retitle assets, update beneficiaries, diversify your investments, and reallocate according to your risk tolerance and age.  Calculate how much you need to save on a monthly basis to meet your retirement goals. If you need help with this, reach out to a Certified Financial PlannerTM for a customized plan. Financial planning after divorce is worth the investment. 


3. Adopt a resolute, positive money attitude

Avoid, at all costs, sticking your hand in the sand.  This is what so many of us divorcees do. We are overwhelmed with trying to maintain our sanity and stability for the sake of our children, that we neglect our own needs. I see many divorcees postpone dealing with their personal finances because they don’t want to deal with the stress and pressure that financial planning after divorce entails.  But you must. Adopt a can-do attitude with your money.  Repeat after me, “I am independent and financially successful.  I am open to positive change. I listen to trusted experts.  The right opportunities seek me out. I am unstoppable in my progress.  I enjoy my journey of prosperity and happiness.” 

While post-divorce numbers may look bleak, account balances do not define you.  Nor will they hold you back. As you reinvent yourself post-divorce, with a fresh hair cut and a gym membership, I challenge you to reinvent yourself financially as well.  As divorce was a financial set-back, it can be a set-up for you to achieve new heights with your finances.  You no longer have a spouse to babysit financially, after all.  You are free to be captain of your own ship. Take ownership of your money habits, and develop new, improved ones.  Rise up.

Many of those who have gone before you did not choose this path.  They neglected to pay attention to their finances and missed out on golden opportunities of wealth accumulation.  But you are here, reading this message. You are destined for more.

I know you are capable of achieving financial freedom.  Will it be easy? No. Will it take work? Yes.

Rise up.  Financial independence awaits.


Need help?  Christina offers $80 divorce financial consultations or $350 for retirement plan reviews. 


Christina Lynn is a CERTIFIED FINANCIAL PLANNER, Certified Divorce Financial Analyst®, Certified Estate Planner®, and a doctoral student in personal financial planning at Kansas-State University.  She works with clients nationwide, and specializes in financial planning for women and families, as well as divorce financial advice.  

Her mission is to educate and empower women to achieve long-term financial success.

Christina is proud to be a mompreneur.  She enjoys the challenge of building a business and furthering her education, balanced with the pursuit of being a great (single) mom.  For fun, she runs Spartan races, travels (on a budget, of course!), and watches Spanish soap operas.

P.S. Want more tools and resources to stay positive during a divorce? Download my Free Divorce Survive & Thrive Kit below!


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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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