If you aren’t financially prepared, divorce can have profound financial consequences on the entire family. Studies show that divorced women face a 30% decline in their standard of living. The legal divorce process can deplete both husband and wife of their financial resources, especially if the divorce involves extended conflict and litigation.

Children of divorced parents are likely to experience the need to adjust to a more moderate lifestyle due to the fact that most live with mothers after the divorce.

Since a woman’s standard of living declines, it only makes sense that her children’s would also.

In some cases you will eventually recover and regain your financial footing, in some cases divorce marks a permanent, downward change in your financial situation. You may be unhappy now but loss of income can make “unhappy” intolerable so, make sure you have planned ahead in a manner that keeps you from jumping out of the “pan into the fire,” so to speak.

Most decisions to divorce are made based on how someone is feeling emotionally. Very few people who enter into the divorce process think about the financial implications until after the process has begun. By that point, attorneys are involved, emotions are high and the battle has begun. It is too late to put reasonable effort into keeping divorce from having a major impact on your financial well-being.

Divorce means separating your financial lives. I want to encourage you to take a close look at your family’s finances in order to have a realistic idea of what divorce will mean for you and your spouse.

The questions below will help you determine what steps you need to take, before filing for divorce. Steps that will lessen financial hardships for you and your children post-divorce.

Questions to Consider Before Filing For Divorce:

1. Do you have adequate money saved that would support yourself and/or your children after the divorce, especially in the first few years when money can be extra tight?
2. Do you have home furnishings, a car, and other possessions you will need after the divorce, or will you need to purchase them?
3. Have you paid off your debt as much as possible? How much debt will be ordered to pay you after the divorce?
4. Who will count the children as withholding exemptions for income tax purposes? Often, the exemption is alternated yearly between mother and father.
5. Do you have adequate education or training necessary to provide for your children and yourself after the divorce? If not, how will you get that education or training?
6. Will you need and can you afford childcare if you have to go to re-enter the workforce after the divorce?
7. Will your work provide healthcare benefits for yourself and your children? Will your spouse’s work cover health benefits for your children if they don’t live with him/her?
8. Does your work provide pension/retirement plans or can you invest for retirement as an individual?
9. If you don’t have all the things you will need to provide for yourself and your children after the divorce, how long will it take you to get them, and how will you get them?
10. Is it possible that you and your ex-spouse could set up college savings funds for your children, so they will not be disadvantaged by the divorce, but still receive help with college?
11. It is difficult to maintain your financial lifestyle after divorce. What are some things that you could give up to save money?
12. There are many smaller family expenses that we sometimes forget about, such as lessons for piano, ballet, karate, etc., extra-curricular school activity fees (e.g., sports, choir, etc.), summer camp, scouting, and many more. How would you cover these kinds of more minor but important expenses?

Now that you’ve taken a close look at some of the financial issues that will come up post-divorce, what do you think the possible financial implications of divorce will be for you? Are you concerned, are you optimistic? I suggest you take time and write down what steps you need to take that will lessen the financial burden before taking any steps toward divorce.

A Few Pre-Divorce Suggestions:

• Close any joint banking accounts.
• Open accounts in your name alone and start having any income deposited there.
• Close all joint credit card accounts by paying the balance down.
• Refinance any property that is held jointly into the name of the spouse who will take possession of the property post-divorce.
• If you have no income, re-enter the work-force and start rebuilding a career.

The negative emotional aspects of divorce are easier to navigate if there are no financial hardships to deal with. I do realize that there are situations where financial control is taken out of your hands, that the legal system does not always work in the favor of everyone who enters into the Family Court System. The more prepared you are, the less likelihood of interference from the “system.”