The other day I received a message on Instagram from a woman asking for my help and guidance. Her message said “My husband abruptly decided on separation a month ago and moved out this week. Do you have any advice on budgeting and how to move forward?”

There’s no doubt about it – navigating a major change with your finances can be difficult, but throw in a separation or divorce and it can be downright overwhelming. 

When it comes to your money, there are many things you’ll want to take into account financially prepare for divorce or separation. The following tips will help you prepare for this life adjustment.

1. Track Your Spending

You might be wondering how on Earth someone is supposed to go from two incomes to one income after dealing with separation or divorce. Once you’ve realized that divorce is on the horizon, the first thing you should do is track your spending so you truly understand exactly where your money is going. 

This knowledge will help guide you when you make important decisions such as “can I afford the mortgage or rent on my own” and “do I need to cut back my spending in any areas?”

While you might be hesitant to do this, it’s an important step in the process. Tracking your spending will give you a clear picture of what your life looks like now and how your divorce will impact your finances. 

Start by categorizing your spending into specific areas such as:

  • Rent/Mortgage payments
  • Household utilities and maintenance
  • Cell Phone 
  • Subscriptions
  • Car Insurance
  • Car Payments
  • Debt Payments
  • Spending Money
  • Gas
  • Children’s expenses

Worried you’ll forget a category? Check out these 45 monthly expenses that you might want to include in your list. 

The goal is to have a very clear picture of your spending so you can make an informed and intentional decision about what you can and cannot keep spending money on. Once you know how you’re spending money now, you’re ready to think about how you’ll spend money in the future. 

2. Prepare For Future Expenses After Divorce

When you encounter a big life change, such as a divorce or separation, chances are likely you’ll encounter new expenses in your life. For instance, if you end up moving into a new home or apartment, you’ll be faced with moving costs, utility start-up costs, and even downpayments. While many of these are one-time expenses, they can add up fast. 

You might also need to add new monthly or recurring expenses to your budget such as health insurance. It’s important to take into consideration additional monthly expenses that you might add to your budget post-divorce. 

The goal is to not be completely caught off guard when these expenses pop up. If you can, start saving money now for any future expenses. Any money saved will help as you handle your finances when separating from your partner.

3. Consider Getting help

When major life changes such as divorce or separation occur, you might need help from experts to guide you in the right direction. Even if your divorce is cordial, consider getting advice or help from a divorce attorney, especially if children are involved. 

As you move into this new life stage, you might also want to seek help from a therapist or trusted friend. An article on points out that people going through divorce may feel guilt, fear, anxiety, depression, and grief. Working with a therapist or having a trusted friend you can turn to can help you express these feelings and work through them.

Many times, getting help means adding another category in your budget. However, many Human Resource Departments have benefits that allow you to receive therapy or legal advice for free. If you are employed, ask your HR Department about these possible options to help save you money.

4. Collect Your Documentation

Part of going through a divorce or separation includes splitting finances and assets. While the laws do vary by state, collecting your documentation and list of assets now will help with the entire process. 

When it comes to financial documents, you’ll want to collect the following:

  • Tax Returns
  • Employment Records
  • Checking Account Statements
  • Savings Account Statements
  • Investing Account Statements
  • Retirement Savings Accounts
  • Debt Records and Balances
  • Wills and Trust Agreements
  • Social Security Statements
  • Children’s Bank Account Information

I recommend taking a full afternoon to gather all this information. Save it all in a folder on your computer so you can easily access it when needed. 

A woman reading documents to financially prepare for divorce

5. Forgo Any Large Purchases

If divorce is on the horizon, press pause on any large purchases you were planning to make. These would include a new car, home remodel, or expensive vacation. As you’re moving through the next few months, you can’t always predict how your finances will look. Adding a new car or debt into the mix can impact your credit score or debt to income ratio. This means that if you go to find a new home or rent an apartment, that new car payment will be taken into account. 

If you can, hold off on any large purchases until you have established your budget and money routine. Then you can decide if there is room in your spending to move forward with your purchase. 

6. Spend Money Wisely

With so many changes going on in your life, now is the time to pull back on your money and spend very wisely. While you might be tempted to spend money to help you feel better, try your best to avoid any impulse spending during this time. 

The truth is that it will take you time to get used to your new financial reality. Expenses might pop up and catch you off guard. Your goal should be to have money set aside for these unexpected expenses so that you don’t have to put them on a credit card or go into debt during your divorce. However, let’s be realistic here. Separating or going through a divorce can lead to debt – especially when you go from two incomes to one. If you do have to take out a loan during this process, try to keep it as minimal as possible. By spending money wisely and living on less now, you’ll be more prepared during this life change.

A few ways to cut back on your spending and be more intentional include:

  • Cancel any subscriptions that are unnecessary
  • Shop around for a lower car insurance rate now that you’re on your own
  • Cook dinner at home or have friends over instead of going out to eat
  • Find free ways to enjoy life such as attending a town festival or going on a hike

While you can’t cut back your spending to $0, being intentional and spending wisely will help you during this transition. 

7. Create a New Budget

As you are going through the separation and divorce process, the best thing you can do is try to create a new budget to match your life. It’s important to remember that budgets change every month. But for you, there will be even more drastic changes with your budget which is totally okay. 

Try your best to predict your expenses. List them out and compare them to the income you’re bringing in. Give yourself grace as you learn how to write a budget that fits your new lifestyle. You won’t get it right all the time or right away, but that’s to be expected. 

Need more guidance with budgeting? Check out the articles below:

The Bottom Line

There’s no doubt about it: separation and divorce are challenging enough…but throw in your finances and it’s even more complicated. I hope that these steps help you financially prepare for divorce or separation and give you peace of mind as you navigate your financial changes and move into this new phase of life. 

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