The Collaborative Divorce Center

Safeguarding Your Financial Future Amidst Divorce Challenges

Don’t Let Divorce Ruin Your Finances

Divorce is one of the most stressful events that can happen in a person’s life. It isn’t just emotionally draining, either, as it can also be catastrophic for your bank account. Whether it’s lost wages, added housing costs, or expensive legal representation, here’s how divorce can ruin your finances along with tips for how to cope.

1. Your income may decrease

Depending on your employment status, divorce may decrease your income for several reasons. For one, when you and your partner divorce, you’re no longer supported by their income. That means you’ll be relying solely on yourself for support.
Additionally, if you have children, you may have to decrease your work hours to pick up the kids if your spouse used to watch them — and lost hours means lost wages.

2. Your childcare costs may increase

When you and your partner are under one roof, you likely can manage your childcare costs together. In fact, one parent may be able to work less (or not at all) and avoid the cost of outside childcare altogether.
However, once you divorce, you might have to find childcare, and everyone knows how expensive it is (childcare is $8,000 per year on average according to the non-profit news organization Marketplace).

Tip: A sympathetic family member or a friend with similar childcare challenges may be able to help lighten the loan. Don’t be afraid to ask for the help you need.

3. Your housing costs may double

Living single is more expensive than living with a roommate or partner. You only have one income to cover the mortgage or rent, plus all of the bills, as opposed to two. That’s why getting a divorce can double your housing costs, as you’re no longer under the same roof.
Whether you’re the partner remaining at home with the mortgage or the person renting an apartment, more of your money is inevitably going towards housing.

Tip: Consider getting a roommate you trust to offset the new costs or even moving in with understanding friends or family (temporarily).

4. Your health insurance may be pricier

Securing good health insurance is difficult enough, whether you receive it from your employer or sign up for it at the Health Insurance Marketplace on That’s why it’s always nice when your or your spouse’s employer picks up a chunk of the cost. However, if you are covered under your spouse’s plan, then divorcing may drastically increase what you pay for health insurance.

To cope, see if you can secure a new plan through your job, or check for potentially affordable deals. Be sure to enter your financial information on to see if you qualify for tax credits that lower your insurance costs.

Tip: Whether you’re seeking coverage through work or through the Health Insurance Marketplace, you’re entitled to a special enrollment period when you experience a life change like divorce.

5. Your retirement savings could take a hit

When you tied the knot, chances are you sat down and mapped out your financial life as a team. If so, you likely planned for a retired life together and strategically structured your 401(k)s in a way that worked for both of you.

However, getting a divorce means you’re no longer getting that RV and exploring the country as a pair. If you have the retirement savings, your spouse may be entitled to a portion of them, and vice versa.

Tip: Consider meeting with a Certified Divorce Financial Analyst or another financial planner as early in the divorce process as possible to get a sense of the impact your divorce will have on your retirement and on your finances overall.

6. You may have to pay your spouse’s debt

Many married couples have joint credit card accounts. There are reasons for this, such as helping one partner improve their credit. But if you’re getting a divorce and your partner has racked up a hefty pile of credit card debt on your joint account, you may be on the hook. That can have a devastating impact on your credit score, especially if your ex decides not to pay that debt off.

Tip: If you’re feeling overwhelmed by debt after your divorce, consider working with a credit counselor. They can help you develop a budget and negotiate an affordable payment plan with your creditors.

7. You may have to pay child support

Few people would disagree that divorce is more complicated when there are children involved. This is true for a variety of reasons, and one of them includes having to pay child support. If you don’t have full custody of the children, then you may be ordered by the court to pay. While this might seem expensive, keep the reason for the support in mind.

Tip: Don’t hesitate to ask for modifications to your support amount if you experience changes in your situation. If you’re laid off or experience an illness that prevents you from working, you may be able to request an adjustment to the amount you pay in child support.

8. You may have to pay alimony

When you and your spouse live together, it’s not uncommon to share everything, from the income that you earn to the expenses that you incur. Once you split up, there’s a chance you may have to make alimony payments (also known as spousal support). This is sometimes the case if you’ve been married a long time and you and your partner had significantly different incomes.

9. Legal fees could add up

Divorce lawyers are necessary for many people to ensure they’re treated fairly through the process. If you can find a way to part on amicable terms without lawyers, you and your ex will save significantly. If the divorce isn’t amicable, or if you have a complicated financial situation or custody issues, a good attorney is essential.

Tip: A kind and respectful divorce will ALWAYS cost less than an adversarial divorce.

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