Divorce is one of the most exhausting and overwhelming transitions out there.  Many of us don’t want to think about our finances in the best of times, so having to face a new financial reality can feel awful.  And not only do you have a new normal to adjust to, but suddenly you also find yourself having to go through it alone, without a partner for the first time in a long time.  No matter how savvy you are with your money, this can be a difficult adjustment.

As if having just gone through a stressful divorce isn’t enough, you now have to figure out how to get a handle on your finances.  This is more than anyone should be expected to deal with, but you can try to reframe it as a great opportunity to think about your goals as a newly single person who doesn’t have to consider anyone’s else’s feelings.  You can use this time to identify what you really want.  Here’s a three-step process to help you get a handle on your finances:

  1. One benefit of being fresh out of a divorce is that you should have a pretty good sense of what you are walking away with from the marriage. You can take a look at this place you are today, and evaluate it.   Understand what you have – maybe a house, some retirement funds, bank accounts; and what you owe – things like a mortgage, a car loan, credit card or student loan debt.  This is a snapshot of where you are today, and is the starting point for your financial future.
  1. You will also need a good sense of what your post-divorce cash flow looks like. I promise it’s not as difficult as it might sound.  Add up the income that you’ll be receiving on a monthly basis.  That may include wages, retirement distributions, child support, spousal support, and possibly other income from rental properties, trusts, or businesses.  Then go through your new expenses.  If you’re still in the house you lived in when you were married, or you moved out a long time ago, it may not have many changes, but if you have major changes in your living arrangements, it could look very different.  To get an idea of what your expenses will look like, it is probably helpful to go through the last few months of bank statements to see where your money actually went in real life.  It’s fine to make estimates as you need to – this isn’t written in stone and you can update it as you get better information.  The biggest changes you are likely to see are housing expenses (rent or mortgage) and health insurance, if you were on your spouse’s policy pre-divorce.  If you don’t yet know the cost of these new expenses, do the best you can to research your options.

It will likely be helpful for you to continue to track your expenses for at least the first few months of your new life to see how reality compares to what you expected. You don’t need to do it forever if you hate it, but it will help you to understand the dynamics of this new situation.

  1. The last step is to do some soul-searching. Now that you know where you stand today, and you can imagine what the next few months and years might look like, take some time to think about what you’d like your life to look like in five, ten, or twenty years.  Identifying your goals can help tremendously in making financial decisions going forward.

One suggestion I always make is to not make any huge financial decisions immediately after a divorce.  It’s a time that’s likely been emotionally draining and many women coming out of a divorce are not at their best decision making capacity.  Typically what that means is not making a major real estate investment until you’re certain you know what you want.  Renting an apartment for a year can give you the time you need to consider what you’re really looking for.  Draining a retirement fund is another example of something with major consequences that can’t be undone.  Take time to carefully consider your decisions, and see if you can find trusted people with whom to talk them through.  If there’s no one in your personal life you would feel comfortable confiding in, you can seek out a financial professional.

There’s good news ahead: a 2019 study by Allianz Life found that the longer women have been divorced, the better they say they are doing financially.  It can be a painful lesson to take charge of your finances solo, but it is often very rewarding and empowering in the long run.