The Divorced Dadvocate: Divorce Support For Dads

256 - Money Matters: Rebuilding Financial Stability After Divorce

• Jude Sandvall • Season 5 • Episode 256

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Divorce isn't just emotionally draining—it's a complete financial reset. From supporting two households on the same income to rebuilding credit, the challenges are real. Check out the latest episode on navigating financial strain during divorce for practical solutions.

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Speaker 1:

Hello and welcome to the show. Today we are going to be talking about navigating financial strain during and after divorce a very important topic. But before we jump in, let me welcome our new members to the Divorced Advocate community. Those are Dan EJ, nico, calvin, chris, david, kyle and Paul. We've got a whole bunch of new men part of the Divorced Advocate community and if you are not already one of them, check it out at thedivorcedadvocatecom. All kinds of resources wherever you're at in your process, wherever you're at as far as resources are concerned, from free to paid resources but go check it out, get the help that you need and deserve at thedivorcedadvocatecom. Okay, navigating financial strain during and after divorce you know it's often described as one of life's most stressful events, and for good reason, and if you're going through it, you know what I'm talking about. While the emotional upheaval is significant, the financial strain that comes with separating lives and assets can be just as overwhelming, sometimes even more so. I know it was for me.

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The process forces individuals to confront a host of financial challenges that can impact both their immediate stability and long-term security. First, the cost of divorce itself can be substantial Legal fees, court costs and expenses related to hiring professionals, such as financial advisors or appraisers, can quickly add up, especially if the divorce is contentious and requires extensive negotiation or litigation. These upfront costs often need to be paid out of personal resources and not joint funds, which will put an immediate pressure on your cash flow. Once the process of divorce is underway, dividing these assets and debts becomes a major hurdle, Untangling years of decades of shared finances is rarely straightforward. Of shared finances is rarely straightforward. Disputes frequently arise over what constitutes marital property and how it should be split, particularly in states with complex property division laws. This can leave both parties with fewer assets than they had anticipated, and in some cases, one spouse may be left responsible for a disproportionate share of marital debts, and this is oftentimes, unfortunately, the case with us guys.

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For many, the transition to supporting two separate households is a shock. Now that seems to be the thing that happens with the women most of the time is the unrealistic expectation Expenses that were once shared. Housing, utilities, insurance and even living costs must now be managed independently and often, if not always, on a reduced income. That's just a simple math equation, right? This can mean a significant drop in standard of living and financial flexibility, forcing individuals to make difficult choices about housing, about transportation and even about their children's needs or wants. Child support and spousal support add another layer of complexity. These payments are not optional and can significantly reduce the amount of money available to the paying spouse each month, sometimes making it difficult to make ends meet For the recipient. There is often anxiety about whether payments will be made consistently and what happens if they stop.

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Long-term financial planning is also disrupted. Divorce can derail retirement plans, reduce savings and complicate tax situations. Individuals who once counted on a shared retirement strategy must now reassess their goals and resources, sometimes with less time to recover from financial setbacks, an issue that is particularly acute for those divorcing later in life. And then, finally, the financial uncertainty and the need to quickly master new budgeting, investment and planning skills can be daunting, especially for those who were less involved in managing household finances during the marriage. The risk of overlooking important details such as updating beneficiaries, closing joint accounts or understanding tax implications can have lasting consequences. In sum, divorce is not just the end of a relationship. It is a financial reset that requires careful planning, adaptability and often professional guidance Usually always professional guidance. By understanding the challenges and proactively addressing them, individuals can begin to regain stability and peace of mind as they move forward. So let's talk about understanding the financial impact, now that I've mostly scared you to death about the financial impact.

Speaker 1:

Divorce fundamentally alters your financial landscape in ways that are both immediate and long-lasting. The transition from a dual income household to a single income often means a significant reduction in available resources, which can dramatically impact your standard of living. Again, this is a simple math equation One household into two means there's more bills, same amount of money coming in. Many couples, while married, structure their expenses, such as mortgage payments, car loans and child care, based on the combined earning power of two incomes. When divorce occurs, these fixed expenses rarely decrease proportionately, but the income supporting them is suddenly halved or even less, creating a financial squeeze that can be difficult to manage. Running two separate households compounds the challenge. Each person now faces their own rent or mortgage, their own utilities, their own insurance and their own daily living expenses. These duplicated costs stretch budgets thin, often forcing both parties to make tough decisions about downsizing, relocating or cutting back on discretionary spending. For many, the reality is a noticeable drop in their standard of living, as the resources that once supported a single shared home must now be divided to support two. Again, simple math.

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Legal fees add another layer of financial strain. The average cost of a traditional divorce in 2025 is about $12,780, but this, as you may know, can substantially rise to $20,000 when children are involved, or even higher if the divorce is contested or drags on due to disputes over assets or custody. These costs include attorney's fees, court filings, mediation and sometimes expert consultations, all of which must be paid up front or during the process, further draining savings and cash flow. Beyond these initial legal expenses, ongoing obligations such as child support and spousal support can place a long-term burden on one or both parties. These payments are court mandated and must be factored into your monthly budget, sometimes leaving little room for savings or unexpected expenses.

Speaker 1:

Financial impact of divorce is not limited to the moment of separation. This is important. It often reverberates for years, affecting everything from retirement planning to the ability to invest in children's education or personal goals. And this is one thing I tell guys all the time who come to me and say, hey, I just want to get this done, is, if you're putting yourself in a bad financial system, it is going to impact you in the long run and for the long term, and it's going to make things more challenging. So paying attention to this now is really, really important. So, in summary, divorce is not just an emotional upheaval. Getting it done is not a good plan, but it's a profound financial reset. Your entire life is going to be reset financially, basically is what it comes down to. So understanding the full scope of these changes and planning proactively, ideally with professional advice, like I said can help individuals navigate this challenging transition and eventually regain financial stability so you can get it done. So let's talk about some of the key financial challenges after divorce, like I said, and then let's talk about strategies for managing the financial strain during and after your divorce, and we'll end up talking about some of the emotional and family considerations of the finances in the divorce as well.

Speaker 1:

So some key financial challenges after the divorce or during the divorce too is. The first one is the division of assets and debts. Dividing marital property is one of the most complex and contentious aspects of divorce. All assets acquired during the marriage, including bank accounts, savings accounts, retirement funds, real estate and even debts, must be split according to your state's laws In community property states. In community property states such as California, texas and Arizona, assets and debts are typically divided 50-50, regardless of who earned or acquired them In equitable distribution. States courts aim for a fair though not necessarily equal division, which can depend on factors like spouse's financial situation and contributions to the marriage. So disagreements about what's fair, attempts to hide assets or confusion over what counts as marital versus separate property can further complicate the process, and it's crucial to understand your state's rules and to fully disclose all assets and debts to avoid legal penalties. This is where your attorney comes in and is very important in guiding you through that process. But again, like I always say, know your state's statutes up front before so that you can talk intelligently with your attorney.

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Another key financial challenge is budgeting for a new reality. Like I said, this is going to be a financial reset for you Post-divorce, your income is likely to decrease, sometimes significantly, while your expenses will increase as you transition to supporting a single household. Developing a realistic, detailed budget is essential. This means listing all sources of income, fixed and variable expenses and new obligations such as child or spousal support. Prioritize essential needs like housing, food, transportation, child care, before discretionary spending, and be prepared to make lifestyle adjustments. I'm going to say that again. Be prepared to make lifestyle adjustments. I'm going to say that again Be prepared to make lifestyle adjustments. It's going to happen. Those could be downsizing your home or cutting non-essential costs. Setting up a reserve account for periodic expenses like insurance or school supplies can help you avoid financial surprises. If expenses exceed income, consider finding additional work or ways to reduce costs.

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Another key financial challenge is credit and financial independence. If you previously relied on joint accounts or your spouse's credit, divorce can leave you with a thin or damaged credit profile. It's important to close or separate joint accounts, pay bills on time and monitor your credit report for errors or unauthorized activity. Rebuilding your credit may involve opening new accounts in your name, keeping credit utilization low and gradually paying down debts. Consider becoming an authorized user on a trusted friend or family's member's account or using a secure credit card to establish a positive payment history. This process can and probably will take time, but is essential for long-term financial independence.

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And the last key financial challenge I've got here and this obviously is not an exhaustive list, but probably the main ones you need to look for is unexpected expenses. Divorce often brings a host of unanticipated costs. Beyond the legal mediation fees, you may face moving expenses, deposits for new housing, utility setup fees and the cost of furnishing a new home or apartment, insurance adjustments like health and auto and renters, child related expenses and tax implications can also arise unexpectedly, so having a financial cushion is important. Even a small emergency fund can help buffer these surprises and reduce stress. Planning for these contingencies early in the process can make the transition smoother and protect your financial stability. Okay, so those are some of the key financial challenges.

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Let's talk about some strategies for managing the financial strain during and after the divorce, and the first one I highly recommend that's why it's number one on my list is create a detailed budget. That is the number one strategy that you can implement. Start by listing all sources of income and every expense you have. Start by listing all sources of income and every expense you have, including those paid quarterly or annually, such as insurance premiums or property taxes, and then also, in creating that budget, track your spending habits by reviewing bank and credit card statements from previous months and years, which will help you anticipate both regular and irregular expenses, and then use this comprehensive budget to identify areas where you can cut back and prioritize essentials like housing, food, transportation and child care. Finally, under the creating a budget strategy, consider creating what is called a zero-based budget where every dollar of income is allocated to a specific category, including savings and discretionary spending. I'm not going to get into detail, but maybe this is another podcast we can do on how you'd create a zero-based budget is another podcast we can do on how you'd create a zero-based budget. But basically you're going to have all of your dollars going towards something. It's a way to budget, anyway.

Speaker 1:

The next strategy to manage your financial strain would be re-evaluate housing, and this one's a hard one sometimes, but assessing whether keeping the marital home is financially feasible in your new circumstances. Maintaining a home on a single income can be challenging, especially with additional expenses post-divorce. Sometimes selling the home and downsizing is the most practical way to free up cash, reduce ongoing expenses and avoid the risk of falling behind on mortgage payments or maintenance costs. Factor in moving costs, deposits for new housing and potential changes in commute or school districts as part of your decision-making process. That is a hard one, I understand, because lots of times our emotions are caught up in where we live, the houses that we may have bought or built, and having to part ways with those can be mentally and emotionally challenging, but it's something that you need to consider in order to mitigate the financial strain during or after the divorce.

Speaker 1:

The next strategy is build a safety net. Begin by auditing your finances to determine what you have, what you owe and where you can cut back. Set up a separate savings account and automate transfers, even if they're small, to consistently build your emergency fund. You can start by having micro goals, saving a couple of hundred dollars at a time, and then gradually work towards a larger cushion. Ideally, you want to get to where you have three to six months worth of living expenses put away in case of emergency, and then understand that financial circumstances may change during and after divorce. So be flexible and adjust your savings goals as needed.

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The next strategy is seek professional guidance. This is really important Again, this is part of building your divorce team, and a certified divorce financial analyst or a financial advisor can help you make informed decisions about asset division, tax implications and long-term planning. Also, a mortgage broker that is versed in how to get financed during and after divorce is an important person to have too, because there are some very specific tricks of how you, in some very intricate ways in which you can and need to do things in order to get finance. So find a certified mortgage broker as well as a certified divorce financial analyst, and these professionals can assist with creating a detailed inventory of assets, understanding the true value of the marital property and developing a realistic post-divorce budget and plan for your housing as well. They'll work alongside your attorney to ensure you get a fair settlement and help you avoid costly mistakes that could impact your financial future. That goes with finding new housing as well, and that's why, when you're looking for loans, if you don't have somebody that can help you with that, that knows and understands the intricacies of divorce and how to get financing for a potential purchase, then it may cost you like tens and hundreds of thousands of dollars. So find professional guidance.

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And finally, the last strategy is update financial documents and your finances in general. Open new individual checking and savings accounts in your name. Enclose or separate joint accounts to establish your own financial presence. Change beneficiaries on insurance policies, retirement accounts and update your will and estate plans to reflect your new circumstances. Review and revise any power of attorney or health care proxy documents as needed, and then, if necessary and this often happens explore additional income. If your expenses are exceeding your income, look for ways to supplement your earnings, such as side gigs, remote work or freelance opportunities. Consider leveraging hobbies or skills for extra income, or seek additional hours or high-paying jobs if possible, or higher-paying jobs if possible, and then any extra income can be directed toward building your emergency fund or paying down debts, doing whatever you can to help stabilize your finances more quickly.

Speaker 1:

All right, so we've talked about all that, some of the key things, the key challenges to be aware of, talked about some of the strategies. Now let's talk about the emotional and family considerations around all of this, and I just want to address some of this, because finances have a huge impact on your mental emotional state. So financial strain doesn't just affect you. It can also ripple outward, impacting your children and your overall well-being in profound ways. When money is tight, distress can manifest in daily life, creating tension, uncertainty and sometimes even conflict within the family, and it has effects on children. Uncertainty and sometimes even conflict within the family, and it has effects on children. Children are sensitive to changes in their environment and they often pick up on parental stress, even if it's not directly discussed. Financial strain can lead to changes in routines, such as moving to a new home, switching schools or cutting back on extracurricular activities and vacations. These disruptions can make children feel insecure or anxious about the future, and in some cases, children may even blame themselves for the family's financial challenges or feel guilty about asking for things they need or want. Also, there's an impact on your well-being For parents.

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Ongoing financial stress can take a toll on our mental and physical health. Worrying about bills, worrying about debt or worrying about providing your family can lead to chronic anxiety, depression, insomnia and even physical symptoms like headaches or high blood pressure. The emotional burden may also make it harder to be present and patient with your children, potentially straining your relationship with them at a time when they need stability and reassurance. I know that one was really a big one for me when there were financial challenges going on and finances were difficult. It was always on my mind and it made it really difficult and hard for me to be present. It made it very difficult and hard for me to be present. It made it very difficult and hard for me to be patient because it was something that was always looming in my mind. So just be cognizant of that. Also, increased conflict Money problems are a common source of conflict between co-parents. Especially when it comes to child support, shared expenses or differing priorities for spending. These disputes can escalate quickly, making effective co-parenting more difficult and exposing children to parental conflict, which research shows can be damaging to their emotional development.

Speaker 1:

Another one another consideration is seeking support. It's important to remember that you don't have to face these challenges alone. Seeking support, just like seeking support from somebody that's a financial expert, is important. Seeking support from counselors, therapists or financial mediators can provide valuable tools for managing that stress. It can provide valuable tools for improving communication, also finding practical solutions to financial disagreements. Professional guidance can also help you and your children process the changes in your lives and build resilience for the future. It's just going to be another thing that you can learn how to communicate more effectively about.

Speaker 1:

Another consideration is and you hear me talk about it all the time on most every podcast is taking care of yourself. Prioritizing self-care through exercise, healthy eating Prioritizing self-care through exercise, healthy eating, adequate sleep and maintaining social connections can help buffer the effect of financial stress. When you take care of your own well-being, you're better equipped to support your children and navigate the challenges of post-divorce life. Ultimately, gentlemen, addressing financial strain isn't just about balancing the checkbook. It's about protecting your family's emotional health and ensuring that everybody can adapt and thrive in your new circumstances. So do not hesitate to reach out or help. Investing in your well-being and your children's stability is one of the most important steps that you can take during this transition.

Speaker 1:

All right, fellas, I hope that that was very helpful for you. That's just a little bit around the navigating financial strain during and after divorce. It is complex, as I'm sure that you're experiencing or have experienced, and it's just one of the parts of the complex process that you're going through. So I hope that you found value in what I shared today. If you did, please share this far and wide on social media or anywhere else, with another divorced or divorcing dad, else with another divorced or divorcing dad. Take a minute to give us a star rating on whatever platform you are listening or watching on. Even more so, give us a comment on what you thought, so others will read it and want to tune in as well. I sincerely appreciate you listening. Stay strong and God bless.

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Jude Sandvall: The Divorced Dadvocate

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