Checklist: Finances During Divorce
No matter how simple, straightforward, or amicable one’s divorce may be, it is still a difficult and complicated life change. The hardest part for me, hands down, was the financial impact separation and divorce had on my life.
For the entire duration of my marriage, I was a student. So my ex earned and managed our finances. I didn’t know much about his earnings, his benefits, our taxes, our expenses, or our savings. I trusted that he knew what he was doing, and was doing it to the best of his ability as well as for the benefit of our entire family.
The day our marriage ended, I didn’t have a job, money in my personal or joint banking accounts, nor money saved. With my ex’s departure, he agreed to pay only the rent for the next 3 months. I was left to figure out how I would pay all my other bills, provide for my daughter, and save. And I had to figure it out quickly.
That first week, I was incredibly overwhelmed by the thought of all of the financial things I needed to attend to. The overwhelm didn’t necessarily stem from what I had to actually do. Rather it stemmed from not knowing what I had to do or how to do it. I didn’t have much of a guide or checklist. And all of the articles I found were lengthy and not necessarily applicable. So I’m going to detail what I did, in the order I did them in, with the hope that it will minimize yours or someones overwhelm.
Secure a source of income. My first order of business was to find a job! I had recently graduated from law school and just taken the bar exam; I didn’t have results back yet and couldn’t wait until I got them to find employment. So I took the first job I could get, at a department store, just so I can have money coming in. I started work the very same week that my ex left. While I knew it wouldn’t at all cover all of my expenses, I knew it was better than nothing. And it gave me a moment to breathe as I figured out what I’d do more permanently.
Close joint bank accounts. My ex and I had joint checking and savings accounts. For the first week or two, he would put money in those joint accounts for me to get groceries or gas. After that, the accounts stayed at $0. Once I realized he was not going to contribute anymore, and I didn’t want to continue having to ask for things, I didn’t want anything to do with those joint accounts. I called the bank, had my name taken off of them, and cut up the cards. I went back to solely using my personal checking and savings accounts. I felt strong and independent in doing so, and it was more practical.
Inventory bills and expenses. My ex paid the majority of our bills for the month he left and the month after. So the month after, in preparation for paying all of the bills myself from then on, I took inventory of all of the bills - rent, cell service, cable/internet/phone, gas, electric, car payment, car insurance, credit cards, student loans, and gym membership. I logged into each account, determined the due date and monthly payment, and added them to my calendar. I calculated the total due each month, how much my current job would cover, and how much I needed to make at my next job.
Address immediate needs. Since I was making minimum wage and only working part-time, there was absolutely no way I could pay all of my bills. Thankfully companies like Spectrum, SoCal Gas, Ford, and Navient are incredibly accommodating. I called each one, explained my circumstances, and was able to get a month (or even 6 with Navient!) of leniency. For that month, I didn’t have to pay the bill. For some of these companies, that leniency comes with a fee. For others, the bill will just be waiting for you when you return a month later (and then you have double the bill!). For others, it just added that month’s bill to the end of your term agreement. Of course, these are not the most favorable conditions, but to address my immediate need, they worked and I was extremely grateful.
Reduce bills and expenses. Now that I had bought myself a moment, I reviewed my inventory of bills and expenses and sought to reduce them. For things like my rent and car note, there was nothing I could do. Those payments were fixed for that term. But I was able to reduce my cell service, cable/internet/phone, car insurance, student loans, and gym membership bills. Separately, these reductions didn’t amount to much in savings. But in total, I was able to noticeably reduce my monthly expenses.
Remove name from bills and expenses. This task I found to be shockingly emotional. I can ask for leniency or reductions without having to reveal that I was doing so because my marriage had ended. But when it came time to remove my ex’s name from all of the bills, I couldn’t avoid mentioning it. So I did this task one by one, as the bills were due for payment a few months later. With some places, like Spectrum, it was shockingly easy. But for others, it required a bit more paperwork and deposits. For most of them, it wasn’t as simple as removing his name. Rather, I had to close or leave that joint account, and then open a brand new account. Having not done this before (because living with my ex was the first time I lived independently), I was a little overwhelmed with the paperwork and the services. But because I often cried during these appointments, I was always given great and understanding service.
Divorce settlement. At some point, it will be time to address finances in the divorce paperwork. Since my ex and I jointly drafted a marital settlement agreement, we discussed these matters first and then put them in the settlement. Our settlement agreement includes stipulations on who carries our daughter on health insurance (my ex does), and who is allowed to claim her for taxes (I am). It also details who is responsible for whose debt. We presented this to the judge, and it was approved.
Get health insurance. While my daughter was covered by my ex, I had to find health insurance. I was able to stay on my ex’s insurance for quite a while after we separated. However, it was a little uncomfortable if I ever needed something from the carrier. So I stayed only until I secured a permanent, full-time job that offered benefits.
Get a retirement savings account. Since I hadn’t worked for the entire duration of our marriage, I did not have a retirement plan or savings account. I’m sure my ex did. But I don’t think I was included. And honestly, I didn’t want to ask. So once I got a permanent, full-time job, I enrolled in their retirement plan. And few things made me feel like more of an adult than doing that.
Update will. I had written a will for my ex and I while we were married. But once we separated, this needed to be updated. I didn’t do this immediately because emotionally I just couldn’t fathom the changes that needed to be made. Instead, I update my will every year at the same time. So when that time came, I removed my ex where appropriate and replaced his name with another (usually my mom).
Get life insurance. It seemed like a natural step after updating my will was to get life insurance. Again, I’m not sure if my ex had it and if it included me. And again, I didn’t want to ask. I talked with my parents about who their life insurance carrier was. I then did a little research, and I reached out to New York Life. They set me up with an agent. She and I met and discussed my lifestyle and my concerns. She then drafted a policy, I agreed to it, and now I have life insurance!
Save. With all of that done - bills transferred over, bills reduced, insurance acquired, daughter taken care of, future taken care of, I started to prioritize saving. Now, I’m still working on this. I’m a horrible saver. I’m a wonderful shopper. But I have savings automatically set aside, and I’ve gotten much better at not touching them.
So, that was my to-do list. I know. It’s a lot. But literally, take it day by day, and step by step. I was so overwhelmed by having to contact each utility that I did it as their due dates approached. That means it happened over the span of a month or two! Take your time and tackle the easiest tasks first. Also, don’t be afraid to be a little vulnerable in the process. I found providers respond well to that and God gave me all kinds of favor!
