5 Critical Steps to Help Women Prepare Financially for Divorce

As we move into the last stages of the pandemic, many couples are resuming their plans to end their marriages. These plans were put on hold during the pandemic, which explains why there was a decline in divorces in 2020.

When a heterosexual marriage ends, women still tend to experience the biggest drop in income, with a 41% drop in household income for women, while that of men drops by only 23%, according to research from If you’ve been considering moving forward with a divorce after a pandemic, here are five critical steps all women need to take to be financially prepared for this stressful transition. As a financial advisor who has also experienced divorce, these steps helped me begin my own transition.

1. Reflect and act

Take some time to reflect on your situation so that you can move into the acceptance phase of realizing that your marriage is over. During this time, you should research and assemble a team of professionals that you will need, such as a marriage counselor, divorce attorney, financial advisor, and tax professional. Having a team of these professionals will empower you to move forward with the next phase of your life. In addition to the above, I also started seeing a therapist, which helped me mentally navigate each step of the divorce process.

2. Open your own bank accounts

If you don’t already have checking and savings accounts in your name, now is the time to open them. You should start by automatically depositing your entire paycheck into your new accounts. During this time, you could simply transfer the necessary funds to contribute to household expenses until the divorce is final. This is the first step in getting into the habit of managing your own finances.. I found this step to be critical because I was able to regain control of my finances early on. The account opening process can also take a long time, so it’s best to start as soon as possible.

3. Start building your credit

You may have credit card accounts that are joint. Now is the time to build your own credit by getting a credit card in your name. This is also a good time to request your FICO credit score from all the credit bureaus so you know how creditworthy you are when it comes to making those big purchases, like buying a house or a car. I am proud that I was able to purchase my own home while still jointly owning a home with my ex-spouse. It was my payment history and credit score that got me approved.

4. Be frugal

As you may know, attorney fees are charged by the hour, which can add up until your divorce is final. Also, moving expenses or possibly losing half of your things will require you to start over and repurchase necessary items like furniture and kitchen equipment. Going through the divorce process is the time to save every penny you have. Here are some tips on how to get started:

  • Review your personal expenses and separate needs from wants. Take a detailed inventory of your expenses. You may find that you spend too much on subscriptions or take too many trips to Starbucks. Doing this can help you find the extra money you need during this transition.
  • Turn your emergency fund into a divorce fund by saving your tax refunds, bonds, or any other discretionary income you may have. Designate a separate bank account for this fund, one without a debit card, so you won’t be tempted to use it. Watching this fund grow can give you the empowerment and motivation to keep going.
  • Stop using credit and switch to cash for your regular purchases. You may need a low or zero balance on your credit card when starting a life on your own. As mentioned above, she will need to have a good credit standing to start her life as a single woman.
  • Automate as many expenses as you can. My ex-spouse paid the bills, so I never had to think about them. As a single mom, I found this to be a daunting task, especially if the bills were due on different dates. I’ve learned that putting your expenses to pay on autopilot keeps bills paid on time and gives you more time for yourself with less worry about missing payment deadlines and incurring late fees.

5. Practice independence

During my divorce experience, I created a cash flow spreadsheet template with the details of my income and expenses. For example, I did my research and estimated what the total cost of renting or buying a house would be. Also, I calculated what utilities, groceries, cable, etc. would cost. while living alone. This process helped me visualize what my new life would be like, while also empowering me to believe that I can live alone again. Doing so helped me make sound financial decisions because I knew what my budget limits were.

Going through a divorce can be one of the most stressful and exhausting experiences of your life. But once it’s behind you, it can also be incredibly freeing. It’s important to prepare mentally and emotionally for a divorce, but preparing financially is critical to your success and well-being. Trust me, your future self will look back and thank you for taking such good care of her.

Wealth Manager, Merit Financial Advisors

Renora Nelson is a Wealth Manager at Merit Financial Advisors, where she helps clients plan and enjoy their retirement years. With over 15 years of experience in the financial industry, she has a bachelor’s degree in accounting and holds her Series 7, 63, 24 and 65 licenses. Renora has a 16 year old son and lives in Georgia.

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