May 19, 2025 • 27 mins
Divorce isn't just emotionally draining—it's a complete financial reset. From supporting two households on the same income to rebuilding credit, the challenges are real. Check out the latest episode on navigating financial strain during divorce for practical solutions.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Hello and welcome to the show.
Today we are going to betalking about navigating
financial strain during andafter divorce a very important
topic.
But before we jump in, let mewelcome our new members to the
Divorced Advocate community.
Those are Dan EJ, nico, calvin,chris, david, kyle and Paul.
(00:23):
We've got a whole bunch of newmen part of the Divorced
Advocate community and if youare not already one of them,
check it out atthedivorcedadvocatecom.
All kinds of resources whereveryou're at in your process,
wherever you're at as far asresources are concerned, from
(00:44):
free to paid resources but gocheck it out, get the help that
you need and deserve atthedivorcedadvocatecom.
Okay, navigating financialstrain during and after divorce
you know it's often described asone of life's most stressful
events, and for good reason, andif you're going through it, you
(01:06):
know what I'm talking about.
While the emotional upheaval issignificant, the financial
strain that comes withseparating lives and assets can
be just as overwhelming,sometimes even more so.
I know it was for me.
The process forces individualsto confront a host of financial
(01:27):
challenges that can impact boththeir immediate stability and
long-term security.
First, the cost of divorceitself can be substantial Legal
fees, court costs and expensesrelated to hiring professionals,
such as financial advisors orappraisers, can quickly add up,
(01:51):
especially if the divorce iscontentious and requires
extensive negotiation orlitigation.
These upfront costs often needto be paid out of personal
resources and not joint funds,which will put an immediate
pressure on your cash flow.
Once the process of divorce isunderway, dividing these assets
(02:15):
and debts becomes a major hurdle, Untangling years of decades of
shared finances is rarelystraightforward.
Of shared finances is rarelystraightforward.
Disputes frequently arise overwhat constitutes marital
property and how it should besplit, particularly in states
with complex property divisionlaws.
This can leave both partieswith fewer assets than they had
(02:38):
anticipated, and in some cases,one spouse may be left
responsible for adisproportionate share of
marital debts, and this isoftentimes, unfortunately, the
case with us guys.
For many, the transition tosupporting two separate
households is a shock.
Now that seems to be the thingthat happens with the women most
(02:59):
of the time is the unrealisticexpectation Expenses that were
once shared.
Housing, utilities, insuranceand even living costs must now
be managed independently andoften, if not always, on a
reduced income.
That's just a simple mathequation, right?
This can mean a significantdrop in standard of living and
(03:21):
financial flexibility, forcingindividuals to make difficult
choices about housing, abouttransportation and even about
their children's needs or wants.
Child support and spousalsupport add another layer of
complexity.
These payments are not optionaland can significantly reduce
the amount of money available tothe paying spouse each month,
(03:44):
sometimes making it difficult tomake ends meet For the
recipient.
There is often anxiety aboutwhether payments will be made
consistently and what happens ifthey stop.
Long-term financial planning isalso disrupted.
Divorce can derail retirementplans, reduce savings and
(04:06):
complicate tax situations.
Individuals who once counted ona shared retirement strategy
must now reassess their goalsand resources, sometimes with
less time to recover fromfinancial setbacks, an issue
that is particularly acute forthose divorcing later in life.
And then, finally, thefinancial uncertainty and the
(04:29):
need to quickly master newbudgeting, investment and
planning skills can be daunting,especially for those who were
less involved in managinghousehold finances during the
marriage.
The risk of overlookingimportant details such as
updating beneficiaries, closingjoint accounts or understanding
tax implications can havelasting consequences.
In sum, divorce is not just theend of a relationship.
(04:53):
It is a financial reset thatrequires careful planning,
adaptability and oftenprofessional guidance Usually
always professional guidance.
By understanding the challengesand proactively addressing them
, individuals can begin toregain stability and peace of
mind as they move forward.
So let's talk aboutunderstanding the financial
(05:16):
impact, now that I've mostlyscared you to death about the
financial impact.
Divorce fundamentally altersyour financial landscape in ways
that are both immediate andlong-lasting.
The transition from a dualincome household to a single
income often means a significantreduction in available
(05:37):
resources, which candramatically impact your
standard of living.
Again, this is a simple mathequation One household into two
means there's more bills, sameamount of money coming in.
Many couples, while married,structure their expenses, such
as mortgage payments, car loansand child care, based on the
combined earning power of twoincomes.
When divorce occurs, thesefixed expenses rarely decrease
(06:01):
proportionately, but the incomesupporting them is suddenly
halved or even less, creating afinancial squeeze that can be
difficult to manage.
Running two separate householdscompounds the challenge.
Each person now faces their ownrent or mortgage, their own
utilities, their own insuranceand their own daily living
(06:24):
expenses.
These duplicated costs stretchbudgets thin, often forcing both
parties to make tough decisionsabout downsizing, relocating or
cutting back on discretionaryspending.
For many, the reality is anoticeable drop in their
standard of living, as theresources that once supported a
(06:45):
single shared home must now bedivided to support two.
Again, simple math.
Legal fees add another layer offinancial strain.
The average cost of atraditional divorce in 2025 is
about $12,780, but this, as youmay know, can substantially rise
(07:05):
to $20,000 when children areinvolved, or even higher if the
divorce is contested or drags ondue to disputes over assets or
custody.
These costs include attorney'sfees, court filings, mediation
and sometimes expertconsultations, all of which must
be paid up front or during theprocess, further draining
(07:28):
savings and cash flow.
Beyond these initial legalexpenses, ongoing obligations
such as child support andspousal support can place a
long-term burden on one or bothparties.
These payments are courtmandated and must be factored
into your monthly budget,sometimes leaving little room
for savings or unexpectedexpenses.
(07:49):
Financial impact of divorce isnot limited to the moment of
separation.
This is important.
It often reverberates for years, affecting everything from
retirement planning to theability to invest in children's
education or personal goals.
And this is one thing I tellguys all the time who come to me
and say, hey, I just want toget this done, is, if you're
(08:12):
putting yourself in a badfinancial system, it is going to
impact you in the long run andfor the long term, and it's
going to make things morechallenging.
So paying attention to this nowis really, really important.
So, in summary, divorce is notjust an emotional upheaval.
Getting it done is not a goodplan, but it's a profound
(08:36):
financial reset.
Your entire life is going to bereset financially, basically is
what it comes down to.
So understanding the full scopeof these changes and planning
proactively, ideally withprofessional advice, like I said
can help individuals navigatethis challenging transition and
eventually regain financialstability so you can get it done
(08:58):
.
So let's talk about some of thekey financial challenges after
divorce, like I said, and thenlet's talk about strategies for
managing the financial strainduring and after your divorce,
and we'll end up talking aboutsome of the emotional and family
considerations of the financesin the divorce as well.
(09:23):
So some key financial challengesafter the divorce or during the
divorce too is.
The first one is the divisionof assets and debts.
Dividing marital property isone of the most complex and
contentious aspects of divorce.
All assets acquired during themarriage, including bank
accounts, savings accounts,retirement funds, real estate
(09:44):
and even debts, must be splitaccording to your state's laws
In community property states.
In community property statessuch as California, texas and
Arizona, assets and debts aretypically divided 50-50,
regardless of who earned oracquired them In equitable
(10:07):
distribution.
States courts aim for a fairthough not necessarily equal
division, which can depend onfactors like spouse's financial
situation and contributions tothe marriage.
So disagreements about what'sfair, attempts to hide assets or
confusion over what counts asmarital versus separate property
(10:29):
can further complicate theprocess, and it's crucial to
understand your state's rulesand to fully disclose all assets
and debts to avoid legalpenalties.
This is where your attorneycomes in and is very important
in guiding you through thatprocess.
But again, like I always say,know your state's statutes up
front before so that you cantalk intelligently with your
(10:50):
attorney.
Another key financial challengeis budgeting for a new reality.
Like I said, this is going tobe a financial reset for you
Post-divorce, your income islikely to decrease, sometimes
significantly, while yourexpenses will increase as you
transition to supporting asingle household.
Developing a realistic,detailed budget is essential.
(11:12):
This means listing all sourcesof income, fixed and variable
expenses and new obligationssuch as child or spousal support
.
Prioritize essential needs likehousing, food, transportation,
child care, before discretionaryspending, and be prepared to
(11:34):
make lifestyle adjustments.
I'm going to say that again.
Be prepared to make lifestyleadjustments.
I'm going to say that again Beprepared to make lifestyle
adjustments.
It's going to happen.
Those could be downsizing yourhome or cutting non-essential
costs.
Setting up a reserve accountfor periodic expenses like
insurance or school supplies canhelp you avoid financial
(11:56):
surprises.
If expenses exceed income,consider finding additional work
or ways to reduce costs.
Another key financial challengeis credit and financial
independence.
If you previously relied onjoint accounts or your spouse's
credit, divorce can leave youwith a thin or damaged credit
(12:18):
profile.
It's important to close orseparate joint accounts, pay
bills on time and monitor yourcredit report for errors or
unauthorized activity.
Rebuilding your credit mayinvolve opening new accounts in
your name, keeping creditutilization low and gradually
paying down debts.
Consider becoming an authorizeduser on a trusted friend or
(12:40):
family's member's account orusing a secure credit card to
establish a positive paymenthistory.
This process can and probablywill take time, but is essential
for long-term financialindependence.
And the last key financialchallenge I've got here and this
obviously is not an exhaustivelist, but probably the main ones
(13:03):
you need to look for isunexpected expenses.
Divorce often brings a host ofunanticipated costs.
Beyond the legal mediation fees, you may face moving expenses,
deposits for new housing,utility setup fees and the cost
of furnishing a new home orapartment, insurance adjustments
(13:25):
like health and auto andrenters, child related expenses
and tax implications can alsoarise unexpectedly, so having a
financial cushion is important.
Even a small emergency fund canhelp buffer these surprises and
reduce stress.
Planning for thesecontingencies early in the
process can make the transitionsmoother and protect your
(13:49):
financial stability.
Okay, so those are some of thekey financial challenges.
Let's talk about some strategiesfor managing the financial
strain during and after thedivorce, and the first one I
highly recommend that's why it'snumber one on my list is create
a detailed budget.
That is the number one strategythat you can implement.
(14:12):
Start by listing all sources ofincome and every expense you
have.
Start by listing all sources ofincome and every expense you
have, including those paidquarterly or annually, such as
insurance premiums or propertytaxes, and then also, in
creating that budget, track yourspending habits by reviewing
bank and credit card statementsfrom previous months and years,
(14:34):
which will help you anticipateboth regular and irregular
expenses, and then use thiscomprehensive budget to identify
areas where you can cut backand prioritize essentials like
housing, food, transportationand child care.
Finally, under the creating abudget strategy, consider
(14:55):
creating what is called azero-based budget where every
dollar of income is allocated toa specific category, including
savings and discretionaryspending.
I'm not going to get intodetail, but maybe this is
another podcast we can do on howyou'd create a zero-based
(15:16):
budget is another podcast we cando on how you'd create a
zero-based budget.
But basically you're going tohave all of your dollars going
towards something.
It's a way to budget, anyway.
The next strategy to manage yourfinancial strain would be
re-evaluate housing, and thisone's a hard one sometimes, but
(15:37):
assessing whether keeping themarital home is financially
feasible in your newcircumstances.
Maintaining a home on a singleincome can be challenging,
especially with additionalexpenses post-divorce.
Sometimes selling the home anddownsizing is the most practical
way to free up cash, reduceongoing expenses and avoid the
(15:58):
risk of falling behind onmortgage payments or maintenance
costs.
Factor in moving costs,deposits for new housing and
potential changes in commute orschool districts as part of your
decision-making process.
That is a hard one, Iunderstand, because lots of
times our emotions are caught upin where we live, the houses
(16:22):
that we may have bought or built, and having to part ways with
those can be mentally andemotionally challenging, but
it's something that you need toconsider in order to mitigate
the financial strain during orafter the divorce.
(16:42):
The next strategy is build asafety net.
Begin by auditing your financesto determine what you have,
what you owe and where you cancut back.
Set up a separate savingsaccount and automate transfers,
even if they're small, toconsistently build your
emergency fund.
(17:02):
You can start by having microgoals, saving a couple of
hundred dollars at a time, andthen gradually work towards a
larger cushion.
Ideally, you want to get towhere you have three to six
months worth of living expensesput away in case of emergency,
(17:23):
and then understand thatfinancial circumstances may
change during and after divorce.
So be flexible and adjust yoursavings goals as needed.
The next strategy is seekprofessional guidance.
This is really important Again,this is part of building your
(17:45):
divorce team, and a certifieddivorce financial analyst or a
financial advisor can help youmake informed decisions about
asset division, tax implicationsand long-term planning.
Also, a mortgage broker that isversed in how to get financed
(18:08):
during and after divorce is animportant person to have too,
because there are some veryspecific tricks of how you, in
some very intricate ways inwhich you can and need to do
things in order to get finance.
So find a certified mortgagebroker as well as a certified
(18:31):
divorce financial analyst, andthese professionals can assist
with creating a detailedinventory of assets,
understanding the true value ofthe marital property and
developing a realisticpost-divorce budget and plan for
your housing as well.
They'll work alongside yourattorney to ensure you get a
fair settlement and help youavoid costly mistakes that could
(18:53):
impact your financial future.
That goes with finding newhousing as well, and that's why,
when you're looking for loans,if you don't have somebody that
can help you with that, thatknows and understands the
intricacies of divorce and howto get financing for a potential
purchase, then it may cost youlike tens and hundreds of
thousands of dollars.
(19:13):
So find professional guidance.
And finally, the last strategyis update financial documents
and your finances in general.
Open new individual checkingand savings accounts in your
name.
Enclose or separate jointaccounts to establish your own
(19:34):
financial presence.
Change beneficiaries oninsurance policies, retirement
accounts and update your willand estate plans to reflect your
new circumstances.
Review and revise any power ofattorney or health care proxy
documents as needed, and then,if necessary and this often
happens explore additionalincome.
(19:55):
If your expenses are exceedingyour income, look for ways to
supplement your earnings, suchas side gigs, remote work or
freelance opportunities.
Consider leveraging hobbies orskills for extra income, or seek
additional hours or high-payingjobs if possible, or
higher-paying jobs if possible,and then any extra income can be
(20:18):
directed toward building youremergency fund or paying down
debts, doing whatever you can tohelp stabilize your finances
more quickly.
All right, so we've talked aboutall that, some of the key
things, the key challenges to beaware of, talked about some of
the strategies.
(20:39):
Now let's talk about theemotional and family
considerations around all ofthis, and I just want to address
some of this, because financeshave a huge impact on your
mental emotional state.
So financial strain doesn'tjust affect you.
It can also ripple outward,impacting your children and your
(21:00):
overall well-being in profoundways.
When money is tight, distresscan manifest in daily life,
creating tension, uncertaintyand sometimes even conflict
within the family, and it haseffects on children.
Uncertainty and sometimes evenconflict within the family, and
it has effects on children.
Children are sensitive tochanges in their environment and
they often pick up on parentalstress, even if it's not
(21:20):
directly discussed.
Financial strain can lead tochanges in routines, such as
moving to a new home, switchingschools or cutting back on
extracurricular activities andvacations.
These disruptions can makechildren feel insecure or
anxious about the future, and insome cases, children may even
blame themselves for thefamily's financial challenges or
(21:42):
feel guilty about asking forthings they need or want.
Also, there's an impact on yourwell-being For parents.
Ongoing financial stress cantake a toll on our mental and
physical health.
Worrying about bills, worryingabout debt or worrying about
providing your family can leadto chronic anxiety, depression,
(22:02):
insomnia and even physicalsymptoms like headaches or high
blood pressure.
The emotional burden may alsomake it harder to be present and
patient with your children,potentially straining your
relationship with them at a timewhen they need stability and
reassurance.
I know that one was really abig one for me when there were
financial challenges going onand finances were difficult.
(22:26):
It was always on my mind and itmade it really difficult and
hard for me to be present.
It made it very difficult andhard for me to be present.
It made it very difficult andhard for me to be patient
because it was something thatwas always looming in my mind.
So just be cognizant of that.
Also, increased conflict Moneyproblems are a common source of
conflict between co-parents.
(22:48):
Especially when it comes tochild support, shared expenses
or differing priorities forspending.
These disputes can escalatequickly, making effective
co-parenting more difficult andexposing children to parental
conflict, which research showscan be damaging to their
emotional development.
(23:10):
Another one anotherconsideration is seeking support
.
It's important to remember thatyou don't have to face these
challenges alone.
Seeking support, just likeseeking support from somebody
that's a financial expert, isimportant.
Seeking support from counselors, therapists or financial
(23:32):
mediators can provide valuabletools for managing that stress.
It can provide valuable toolsfor improving communication,
also finding practical solutionsto financial disagreements.
Professional guidance can alsohelp you and your children
process the changes in yourlives and build resilience for
the future.
It's just going to be anotherthing that you can learn how to
(23:57):
communicate more effectivelyabout.
Another consideration is and youhear me talk about it all the
time on most every podcast istaking care of yourself.
Prioritizing self-care throughexercise, healthy eating
Prioritizing self-care throughexercise, healthy eating,
adequate sleep and maintainingsocial connections can help
(24:17):
buffer the effect of financialstress.
When you take care of your ownwell-being, you're better
equipped to support yourchildren and navigate the
challenges of post-divorce life.
Ultimately, gentlemen,addressing financial strain
isn't just about balancing thecheckbook.
It's about protecting yourfamily's emotional health and
(24:38):
ensuring that everybody canadapt and thrive in your new
circumstances.
So do not hesitate to reach outor help.
Investing in your well-beingand your children's stability is
one of the most important stepsthat you can take during this
transition.
All right, fellas, I hope thatthat was very helpful for you.
(25:00):
That's just a little bit aroundthe navigating financial strain
during and after divorce.
It is complex, as I'm sure thatyou're experiencing or have
experienced, and it's just oneof the parts of the complex
process that you're goingthrough.
So I hope that you found valuein what I shared today.
(25:23):
If you did, please share thisfar and wide on social media or
anywhere else, with anotherdivorced or divorcing dad, else
with another divorced ordivorcing dad.
Take a minute to give us a starrating on whatever platform you
are listening or watching on.
Even more so, give us a commenton what you thought, so others
will read it and want to tune inas well.
(25:46):
I sincerely appreciate youlistening.
Stay strong and God bless.
Hello and welcome to the show.
Today we are going to betalking about navigating
financial strain during andafter divorce a very important
topic.
But before we jump in, let mewelcome our new members to the
Divorced Advocate community.
Those are Dan EJ, nico, calvin,chris, david, kyle and Paul.
(00:23):
We've got a whole bunch of newmen part of the Divorced
Advocate community and if youare not already one of them,
check it out atthedivorcedadvocatecom.
All kinds of resources whereveryou're at in your process,
wherever you're at as far asresources are concerned, from
(00:44):
free to paid resources but gocheck it out, get the help that
you need and deserve atthedivorcedadvocatecom.
Okay, navigating financialstrain during and after divorce
you know it's often described asone of life's most stressful
events, and for good reason, andif you're going through it, you
(01:06):
know what I'm talking about.
While the emotional upheaval issignificant, the financial
strain that comes withseparating lives and assets can
be just as overwhelming,sometimes even more so.
I know it was for me.
The process forces individualsto confront a host of financial
(01:27):
challenges that can impact boththeir immediate stability and
long-term security.
First, the cost of divorceitself can be substantial Legal
fees, court costs and expensesrelated to hiring professionals,
such as financial advisors orappraisers, can quickly add up,
(01:51):
especially if the divorce iscontentious and requires
extensive negotiation orlitigation.
These upfront costs often needto be paid out of personal
resources and not joint funds,which will put an immediate
pressure on your cash flow.
Once the process of divorce isunderway, dividing these assets
(02:15):
and debts becomes a major hurdle, Untangling years of decades of
shared finances is rarelystraightforward.
Of shared finances is rarelystraightforward.
Disputes frequently arise overwhat constitutes marital
property and how it should besplit, particularly in states
with complex property divisionlaws.
This can leave both partieswith fewer assets than they had
(02:38):
anticipated, and in some cases,one spouse may be left
responsible for adisproportionate share of
marital debts, and this isoftentimes, unfortunately, the
case with us guys.
For many, the transition tosupporting two separate
households is a shock.
Now that seems to be the thingthat happens with the women most
(02:59):
of the time is the unrealisticexpectation Expenses that were
once shared.
Housing, utilities, insuranceand even living costs must now
be managed independently andoften, if not always, on a
reduced income.
That's just a simple mathequation, right?
This can mean a significantdrop in standard of living and
(03:21):
financial flexibility, forcingindividuals to make difficult
choices about housing, abouttransportation and even about
their children's needs or wants.
Child support and spousalsupport add another layer of
complexity.
These payments are not optionaland can significantly reduce
the amount of money available tothe paying spouse each month,
(03:44):
sometimes making it difficult tomake ends meet For the
recipient.
There is often anxiety aboutwhether payments will be made
consistently and what happens ifthey stop.
Long-term financial planning isalso disrupted.
Divorce can derail retirementplans, reduce savings and
(04:06):
complicate tax situations.
Individuals who once counted ona shared retirement strategy
must now reassess their goalsand resources, sometimes with
less time to recover fromfinancial setbacks, an issue
that is particularly acute forthose divorcing later in life.
And then, finally, thefinancial uncertainty and the
(04:29):
need to quickly master newbudgeting, investment and
planning skills can be daunting,especially for those who were
less involved in managinghousehold finances during the
marriage.
The risk of overlookingimportant details such as
updating beneficiaries, closingjoint accounts or understanding
tax implications can havelasting consequences.
In sum, divorce is not just theend of a relationship.
(04:53):
It is a financial reset thatrequires careful planning,
adaptability and oftenprofessional guidance Usually
always professional guidance.
By understanding the challengesand proactively addressing them
, individuals can begin toregain stability and peace of
mind as they move forward.
So let's talk aboutunderstanding the financial
(05:16):
impact, now that I've mostlyscared you to death about the
financial impact.
Divorce fundamentally altersyour financial landscape in ways
that are both immediate andlong-lasting.
The transition from a dualincome household to a single
income often means a significantreduction in available
(05:37):
resources, which candramatically impact your
standard of living.
Again, this is a simple mathequation One household into two
means there's more bills, sameamount of money coming in.
Many couples, while married,structure their expenses, such
as mortgage payments, car loansand child care, based on the
combined earning power of twoincomes.
When divorce occurs, thesefixed expenses rarely decrease
(06:01):
proportionately, but the incomesupporting them is suddenly
halved or even less, creating afinancial squeeze that can be
difficult to manage.
Running two separate householdscompounds the challenge.
Each person now faces their ownrent or mortgage, their own
utilities, their own insuranceand their own daily living
(06:24):
expenses.
These duplicated costs stretchbudgets thin, often forcing both
parties to make tough decisionsabout downsizing, relocating or
cutting back on discretionaryspending.
For many, the reality is anoticeable drop in their
standard of living, as theresources that once supported a
(06:45):
single shared home must now bedivided to support two.
Again, simple math.
Legal fees add another layer offinancial strain.
The average cost of atraditional divorce in 2025 is
about $12,780, but this, as youmay know, can substantially rise
(07:05):
to $20,000 when children areinvolved, or even higher if the
divorce is contested or drags ondue to disputes over assets or
custody.
These costs include attorney'sfees, court filings, mediation
and sometimes expertconsultations, all of which must
be paid up front or during theprocess, further draining
(07:28):
savings and cash flow.
Beyond these initial legalexpenses, ongoing obligations
such as child support andspousal support can place a
long-term burden on one or bothparties.
These payments are courtmandated and must be factored
into your monthly budget,sometimes leaving little room
for savings or unexpectedexpenses.
(07:49):
Financial impact of divorce isnot limited to the moment of
separation.
This is important.
It often reverberates for years, affecting everything from
retirement planning to theability to invest in children's
education or personal goals.
And this is one thing I tellguys all the time who come to me
and say, hey, I just want toget this done, is, if you're
(08:12):
putting yourself in a badfinancial system, it is going to
impact you in the long run andfor the long term, and it's
going to make things morechallenging.
So paying attention to this nowis really, really important.
So, in summary, divorce is notjust an emotional upheaval.
Getting it done is not a goodplan, but it's a profound
(08:36):
financial reset.
Your entire life is going to bereset financially, basically is
what it comes down to.
So understanding the full scopeof these changes and planning
proactively, ideally withprofessional advice, like I said
can help individuals navigatethis challenging transition and
eventually regain financialstability so you can get it done
(08:58):
.
So let's talk about some of thekey financial challenges after
divorce, like I said, and thenlet's talk about strategies for
managing the financial strainduring and after your divorce,
and we'll end up talking aboutsome of the emotional and family
considerations of the financesin the divorce as well.
(09:23):
So some key financial challengesafter the divorce or during the
divorce too is.
The first one is the divisionof assets and debts.
Dividing marital property isone of the most complex and
contentious aspects of divorce.
All assets acquired during themarriage, including bank
accounts, savings accounts,retirement funds, real estate
(09:44):
and even debts, must be splitaccording to your state's laws
In community property states.
In community property statessuch as California, texas and
Arizona, assets and debts aretypically divided 50-50,
regardless of who earned oracquired them In equitable
(10:07):
distribution.
States courts aim for a fairthough not necessarily equal
division, which can depend onfactors like spouse's financial
situation and contributions tothe marriage.
So disagreements about what'sfair, attempts to hide assets or
confusion over what counts asmarital versus separate property
(10:29):
can further complicate theprocess, and it's crucial to
understand your state's rulesand to fully disclose all assets
and debts to avoid legalpenalties.
This is where your attorneycomes in and is very important
in guiding you through thatprocess.
But again, like I always say,know your state's statutes up
front before so that you cantalk intelligently with your
(10:50):
attorney.
Another key financial challengeis budgeting for a new reality.
Like I said, this is going tobe a financial reset for you
Post-divorce, your income islikely to decrease, sometimes
significantly, while yourexpenses will increase as you
transition to supporting asingle household.
Developing a realistic,detailed budget is essential.
(11:12):
This means listing all sourcesof income, fixed and variable
expenses and new obligationssuch as child or spousal support
.
Prioritize essential needs likehousing, food, transportation,
child care, before discretionaryspending, and be prepared to
(11:34):
make lifestyle adjustments.
I'm going to say that again.
Be prepared to make lifestyleadjustments.
I'm going to say that again Beprepared to make lifestyle
adjustments.
It's going to happen.
Those could be downsizing yourhome or cutting non-essential
costs.
Setting up a reserve accountfor periodic expenses like
insurance or school supplies canhelp you avoid financial
(11:56):
surprises.
If expenses exceed income,consider finding additional work
or ways to reduce costs.
Another key financial challengeis credit and financial
independence.
If you previously relied onjoint accounts or your spouse's
credit, divorce can leave youwith a thin or damaged credit
(12:18):
profile.
It's important to close orseparate joint accounts, pay
bills on time and monitor yourcredit report for errors or
unauthorized activity.
Rebuilding your credit mayinvolve opening new accounts in
your name, keeping creditutilization low and gradually
paying down debts.
Consider becoming an authorizeduser on a trusted friend or
(12:40):
family's member's account orusing a secure credit card to
establish a positive paymenthistory.
This process can and probablywill take time, but is essential
for long-term financialindependence.
And the last key financialchallenge I've got here and this
obviously is not an exhaustivelist, but probably the main ones
(13:03):
you need to look for isunexpected expenses.
Divorce often brings a host ofunanticipated costs.
Beyond the legal mediation fees, you may face moving expenses,
deposits for new housing,utility setup fees and the cost
of furnishing a new home orapartment, insurance adjustments
(13:25):
like health and auto andrenters, child related expenses
and tax implications can alsoarise unexpectedly, so having a
financial cushion is important.
Even a small emergency fund canhelp buffer these surprises and
reduce stress.
Planning for thesecontingencies early in the
process can make the transitionsmoother and protect your
(13:49):
financial stability.
Okay, so those are some of thekey financial challenges.
Let's talk about some strategiesfor managing the financial
strain during and after thedivorce, and the first one I
highly recommend that's why it'snumber one on my list is create
a detailed budget.
That is the number one strategythat you can implement.
(14:12):
Start by listing all sources ofincome and every expense you
have.
Start by listing all sources ofincome and every expense you
have, including those paidquarterly or annually, such as
insurance premiums or propertytaxes, and then also, in
creating that budget, track yourspending habits by reviewing
bank and credit card statementsfrom previous months and years,
(14:34):
which will help you anticipateboth regular and irregular
expenses, and then use thiscomprehensive budget to identify
areas where you can cut backand prioritize essentials like
housing, food, transportationand child care.
Finally, under the creating abudget strategy, consider
(14:55):
creating what is called azero-based budget where every
dollar of income is allocated toa specific category, including
savings and discretionaryspending.
I'm not going to get intodetail, but maybe this is
another podcast we can do on howyou'd create a zero-based
(15:16):
budget is another podcast we cando on how you'd create a
zero-based budget.
But basically you're going tohave all of your dollars going
towards something.
It's a way to budget, anyway.
The next strategy to manage yourfinancial strain would be
re-evaluate housing, and thisone's a hard one sometimes, but
(15:37):
assessing whether keeping themarital home is financially
feasible in your newcircumstances.
Maintaining a home on a singleincome can be challenging,
especially with additionalexpenses post-divorce.
Sometimes selling the home anddownsizing is the most practical
way to free up cash, reduceongoing expenses and avoid the
(15:58):
risk of falling behind onmortgage payments or maintenance
costs.
Factor in moving costs,deposits for new housing and
potential changes in commute orschool districts as part of your
decision-making process.
That is a hard one, Iunderstand, because lots of
times our emotions are caught upin where we live, the houses
(16:22):
that we may have bought or built, and having to part ways with
those can be mentally andemotionally challenging, but
it's something that you need toconsider in order to mitigate
the financial strain during orafter the divorce.
(16:42):
The next strategy is build asafety net.
Begin by auditing your financesto determine what you have,
what you owe and where you cancut back.
Set up a separate savingsaccount and automate transfers,
even if they're small, toconsistently build your
emergency fund.
(17:02):
You can start by having microgoals, saving a couple of
hundred dollars at a time, andthen gradually work towards a
larger cushion.
Ideally, you want to get towhere you have three to six
months worth of living expensesput away in case of emergency,
(17:23):
and then understand thatfinancial circumstances may
change during and after divorce.
So be flexible and adjust yoursavings goals as needed.
The next strategy is seekprofessional guidance.
This is really important Again,this is part of building your
(17:45):
divorce team, and a certifieddivorce financial analyst or a
financial advisor can help youmake informed decisions about
asset division, tax implicationsand long-term planning.
Also, a mortgage broker that isversed in how to get financed
(18:08):
during and after divorce is animportant person to have too,
because there are some veryspecific tricks of how you, in
some very intricate ways inwhich you can and need to do
things in order to get finance.
So find a certified mortgagebroker as well as a certified
(18:31):
divorce financial analyst, andthese professionals can assist
with creating a detailedinventory of assets,
understanding the true value ofthe marital property and
developing a realisticpost-divorce budget and plan for
your housing as well.
They'll work alongside yourattorney to ensure you get a
fair settlement and help youavoid costly mistakes that could
(18:53):
impact your financial future.
That goes with finding newhousing as well, and that's why,
when you're looking for loans,if you don't have somebody that
can help you with that, thatknows and understands the
intricacies of divorce and howto get financing for a potential
purchase, then it may cost youlike tens and hundreds of
thousands of dollars.
(19:13):
So find professional guidance.
And finally, the last strategyis update financial documents
and your finances in general.
Open new individual checkingand savings accounts in your
name.
Enclose or separate jointaccounts to establish your own
(19:34):
financial presence.
Change beneficiaries oninsurance policies, retirement
accounts and update your willand estate plans to reflect your
new circumstances.
Review and revise any power ofattorney or health care proxy
documents as needed, and then,if necessary and this often
happens explore additionalincome.
(19:55):
If your expenses are exceedingyour income, look for ways to
supplement your earnings, suchas side gigs, remote work or
freelance opportunities.
Consider leveraging hobbies orskills for extra income, or seek
additional hours or high-payingjobs if possible, or
higher-paying jobs if possible,and then any extra income can be
(20:18):
directed toward building youremergency fund or paying down
debts, doing whatever you can tohelp stabilize your finances
more quickly.
All right, so we've talked aboutall that, some of the key
things, the key challenges to beaware of, talked about some of
the strategies.
(20:39):
Now let's talk about theemotional and family
considerations around all ofthis, and I just want to address
some of this, because financeshave a huge impact on your
mental emotional state.
So financial strain doesn'tjust affect you.
It can also ripple outward,impacting your children and your
(21:00):
overall well-being in profoundways.
When money is tight, distresscan manifest in daily life,
creating tension, uncertaintyand sometimes even conflict
within the family, and it haseffects on children.
Uncertainty and sometimes evenconflict within the family, and
it has effects on children.
Children are sensitive tochanges in their environment and
they often pick up on parentalstress, even if it's not
(21:20):
directly discussed.
Financial strain can lead tochanges in routines, such as
moving to a new home, switchingschools or cutting back on
extracurricular activities andvacations.
These disruptions can makechildren feel insecure or
anxious about the future, and insome cases, children may even
blame themselves for thefamily's financial challenges or
(21:42):
feel guilty about asking forthings they need or want.
Also, there's an impact on yourwell-being For parents.
Ongoing financial stress cantake a toll on our mental and
physical health.
Worrying about bills, worryingabout debt or worrying about
providing your family can leadto chronic anxiety, depression,
(22:02):
insomnia and even physicalsymptoms like headaches or high
blood pressure.
The emotional burden may alsomake it harder to be present and
patient with your children,potentially straining your
relationship with them at a timewhen they need stability and
reassurance.
I know that one was really abig one for me when there were
financial challenges going onand finances were difficult.
(22:26):
It was always on my mind and itmade it really difficult and
hard for me to be present.
It made it very difficult andhard for me to be present.
It made it very difficult andhard for me to be patient
because it was something thatwas always looming in my mind.
So just be cognizant of that.
Also, increased conflict Moneyproblems are a common source of
conflict between co-parents.
(22:48):
Especially when it comes tochild support, shared expenses
or differing priorities forspending.
These disputes can escalatequickly, making effective
co-parenting more difficult andexposing children to parental
conflict, which research showscan be damaging to their
emotional development.
(23:10):
Another one anotherconsideration is seeking support
.
It's important to remember thatyou don't have to face these
challenges alone.
Seeking support, just likeseeking support from somebody
that's a financial expert, isimportant.
Seeking support from counselors, therapists or financial
(23:32):
mediators can provide valuabletools for managing that stress.
It can provide valuable toolsfor improving communication,
also finding practical solutionsto financial disagreements.
Professional guidance can alsohelp you and your children
process the changes in yourlives and build resilience for
the future.
It's just going to be anotherthing that you can learn how to
(23:57):
communicate more effectivelyabout.
Another consideration is and youhear me talk about it all the
time on most every podcast istaking care of yourself.
Prioritizing self-care throughexercise, healthy eating
Prioritizing self-care throughexercise, healthy eating,
adequate sleep and maintainingsocial connections can help
(24:17):
buffer the effect of financialstress.
When you take care of your ownwell-being, you're better
equipped to support yourchildren and navigate the
challenges of post-divorce life.
Ultimately, gentlemen,addressing financial strain
isn't just about balancing thecheckbook.
It's about protecting yourfamily's emotional health and
(24:38):
ensuring that everybody canadapt and thrive in your new
circumstances.
So do not hesitate to reach outor help.
Investing in your well-beingand your children's stability is
one of the most important stepsthat you can take during this
transition.
All right, fellas, I hope thatthat was very helpful for you.
(25:00):
That's just a little bit aroundthe navigating financial strain
during and after divorce.
It is complex, as I'm sure thatyou're experiencing or have
experienced, and it's just oneof the parts of the complex
process that you're goingthrough.
So I hope that you found valuein what I shared today.
(25:23):
If you did, please share thisfar and wide on social media or
anywhere else, with anotherdivorced or divorcing dad, else
with another divorced ordivorcing dad.
Take a minute to give us a starrating on whatever platform you
are listening or watching on.
Even more so, give us a commenton what you thought, so others
will read it and want to tune inas well.
(25:46):
I sincerely appreciate youlistening.
Stay strong and God bless.
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