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Becoming Financially Literate Before, During, and After a Divorce

April is National Financial Literacy Month, which means there will be a lot of information popping up urging you to look at your finances. Perhaps this comes at the right time if you are contemplating a divorce, or in the process of one. Or maybe you have recently gotten a divorce and wish you had focused more on a financial plan before papers were signed. The good news is that it isn’t too late to become financially literate, no matter what stage of divorce you are in.

There are several phases to divorce: emotional, social, co-parenting, legal, and financial. Of these, the financial stage brings challenges as often one of the divorcing adults knows little about the family’s finances. One partner usually serves as the Chief Executive Officer (CEO) in the family by doling out lunch money, taxiing children to school and extracurricular activities, and paying the monthly bills. The other partner typically serves as the Chief Financial Officer (CFO) and manages the investments for the future – retirement, etc., as opposed to being in charge of the day-to-day expenses.

It is important to understand the finances, including assets, liabilities, and what comes into the home as income and what goes out as expenses. Both parties are better prepared for an untimely event such as divorce or death when they know what they have in terms of money and how much it costs to support their household.

Financial problems can tear a marriage apart and are often the primary factor that leads to divorce. Once a decision to separate or divorce has been reached, all sorts of questions bubble to the surface. These questions are often clouded by wounded emotions and accompanied by mutual accusations, which comes as no surprise. If a couple cannot solve their financial difficulties during their marriage, it is unlikely that they will be able to agree on pressing financial issues when it has fallen apart.

Meeting with a financial expert, like a CDFA, can be a life saver for those going through a divorce. They will focus on making the best decisions for the settlement (division of assets and liabilities and child support and or alimony), but of equal importance is how they help clients prepare for post-divorce. The post-divorce life requires developing strategies to prepare for the future and maintaining a lifestyle that enhances the family’s future well-being in two homes.

Being financial literate at the forefront of a divorce includes building a divorce team. Having a team is extremely beneficial to organize both partners’ current financial situation and will lay out how a settlement will impact your lifestyle- both now and in the future. The CDFA collaborates with your family lawyer or mediator to organize financial data, analyze long term financial implications, and produce the financial reports needed. As a team, this will show how your financial outcomes will play out for each settlement option. Having this information allows you to make informed decisions, especially when emotions are high.

During the divorce, these are examples of situations that tend to come to light:

  • Integrating tax issues.

  • Analyzing pension and retirement plan issues.

  • Determining if you can afford the matrimonial home – and if not, what might be an affordable alternative.

  • Evaluating your insurance needs.

  • Establishing assumptions for projecting inflation and rates of return.

  • Collecting financial and expense data.

  • Helping you identify future financial goals.

  • Providing you and your lawyer with data that shows the financial effect of any given divorce settlement.

  • Serving as expert witness if the case should go to court, or in mediation or arbitration proceedings.

  • Identifying the short-term and long-term effects of dividing property.

Understanding how to manage personal finance post-divorce starts with budgeting. Separating the partners’ incomes and expenses is crucial to painting a picture of how finances will be managed once a settlement is reached. Once a budget is created, a long-term financial plan will outline the consequences of a divorce settlement.

Other plans that will be put in place post-divorce by your divorce team are:

  • Setting retirement objectives.

  • Determining how much risk you are willing to take with your investments.

  • Identifying what kind of lifestyle you want.

  • Determining the costs of your children’s education.

In conclusion, to be financially literate as it relates to a divorce, it is essential to analyze the marriage as if it were a financial contract. A CDFA is uniquely suited to explain financial options, help set priorities, and lead you through the hard choices ahead. Professional divorce financial analyses created with your CDFA and divorce team, increase the accuracy of financial information so that both parties arrive at workable settlements more quickly.


Brenda Dozier, Ph.D., is a Certified Divorce Financial Analyst (CDFA), trained therapist, divorce coach, and author specializing in helping individuals navigate the complex emotional and financial realms of divorce. As a CDFA, Brenda works in partnership with the divorce attorney to ensure all financial assets are included in the process and that the divorcing individual will be able to meet their budgetary needs long after the divorce is final. Please visit to schedule your free consultation.

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