Imagine dissolving a business partnership that’s been operating for years. It requires the separation and allotment of assets and liabilities. It’s emotional; the financial trajectory and lifestyle of each partner is at stake. Additionally, imagine there is no written legal plan for what happens when the business decides that it’s all over.

A marriage heading for divorce is no different. Below, we share how to prepare for the next chapter of your life, and for the possibly turbulent interim that lies ahead.

Household Cash Flow

It’s time to gain a clear understanding of your expenses and your income. Collect statements from all bank accounts, open loans, investments, etc. Review all pay stubs so you can determine how much the marriage has left over after the necessary bills are paid each month. While you’re at it, make hard copies for yourself.

Assets and Liabilities

First, create a list of what you own that carries significant value. Here are some examples:

– Bank Accounts, Retirement Accounts
– Real Estate
– Valuable personal items like boats, RVs, vehicles, jewelry, etc.

Next, document your debts. Who do you owe? This may include any of the following:

– Mortgage Loans
– Auto Loans
– Student Loans
– Personal Loans
– Credit Card Balances

Settling Debt

To the extent possible, payoff credit cards and other loans ahead of time. Debt can get very messy during the divorce process. Creditors are not interested in any decisions that have been made in terms of “who owes what” as part of a divorce. A late payment made by your spouse could negatively affect your credit.

Be sure to close any joint accounts after the balance is paid off.

Children’s Education

Where will the children attend school or daycare? Who picks them up and drops them off on what days? How will you pay for their school or school supplies, and what is the plan to save for their future education? If you’re a parent, this presents added complexity and decisions need to be collectively made.

Upcoming Purchases

You’ve already completed the Household Cash Flow exercise, so you have a good idea which expenses will continue on after the divorce. Remember, you may need a deposit or down payment for a new home, and your new home may require appliances, lawn care equipment, cookware, and other household amenities. In general, it’s best practice not to make any large purchases leading up to your separation. An experienced CDFA® can provide advice about how much cash to keep available for upcoming purchases or advice as to how to get access to other funds during your settlement.

Consult the Experts

Be skeptical of advice from friends – even those who have gone through a divorce. They mean well but are likely unqualified to advise you for your specific situation. There’s no substitute for consulting a professional with expertise. A reputable attorney will understand the laws as they exist in your state and will be equipped to help you make sound decisions leading up to the legal process while a reputable CDFA® can help you make sound financial decisions along the way.

The divorce process can be overwhelming but the more you can get organized and prepare on your own, not only can you keep your costs down but you can give the professionals you work with a great foundation understanding your case. If you feel in the dark about your financial situation and unable to complete any of the above steps, consider reaching out to a financial professional for help.


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