Infographic that talks about what to do about finances when you're going through a divorce.

Divorce and finances

What to consider when navigating through your divorce and finances.

When someone gets married, the last thing they want to consider is how to get through a divorce financially. However, divorce can come at any age and at any stage of a marriage. One of the most important things you can do to help ensure a stable life for yourself after a divorce is to focus on getting your finances in order. This is why financial planning can be critical for starting over after a divorce.

As preparations for the divorce begin, it can be helpful to refer to a divorce checklist. Also, consider these areas as you approach financial planning during and after a divorce.

Understanding financial impacts

It’s important to understanding how the divorce will impact you financially. Since you’ll likely be going from two sources of income down to one, your single income might not be enough to maintain your standard of living. Hiring a financial professional might be a good option to help you through the financial process before you work on a divorce settlement agreement. Use this spending calculator to see what you're spending today and what you could be spending if adjustments were made.

Gathering important documents

When gathering important documents, the minimum number of years you'll want to go back is three. Documentation should include:

  • Bank and credit card statements
  • Loan paperwork
  • Real estate papers
  • Retirement account details
  • Insurance documents and wills
  • Stocks and bonds
  • Tax returns
  • A list of personal property and sentimental items
  • A home inventory

Evaluating your accounts

Consider closing joint accounts, changing any direct deposits, and updating your address on accounts as necessary. It’s also important to consider whether beneficiary changes are needed for life insurance, retirement accounts and other legal documents including a will and power of attorney.

Creating a budget

Due to the impacts a divorce can have on your finances, it’s a good idea to consider creating a new monthly budget. Be sure to include everything from your water bill to medical bills to groceries and home repairs to your child's sports fees.

  • Total up your expenses
  • Total up your income
  • Subtract your expenses from your income
  • Determine if the net result is positive or negative

If the result is positive, that’s a good thing.If the result is negative, you may want to consider downsizing, or cutting back on things such as eating out, shopping, personal grooming or streaming services. You may also want to consider finding additional ways to supplement your income, such as getting a second job, to help cover your monthly expenses.

Rethinking health insurance

If you depend on your spouse for health insurance, you’ll likely need to find your own coverage after the divorce. If your employer offers a health insurance option, it’s a good idea to look into switching to your employer’s plan. Divorce is considered a life change that allows enrollment outside the typical enrollment period. COBRA insurance is another option, but it can be expensive.

Creating new goals

Planning for your financial future is key to moving forward, including setting short- and long-term savings goals.

  • Short-term goals: It's a good time to start building an emergency fund if you don’t already have one. You may want to consider using extra funds to get out of debt as well.
  • Long-term goals: You may also want to consider saving for college and/or saving for a mortgage.

Whether it’s a first divorce or not, it’s never an easy thing to get through. It’s a good idea to surround yourself with people who love and support you, and don’t forget to ask for help if you need it.

When going through a divorce, it is important to set aside time to evaluate your finances and make any updates. This list of must-dos can help you protect your financial and emotional health as you move forward.1

Things to do

Collect and make copies of important documents:

  • Tax returns
  • Financial and bank statements
  • Retirement and insurance account details
  • Wills

Note passwords and usernames to online accounts.

Change your address as necessary.

Establish a separate bank account and change direct deposits.

Update beneficiary designations for retirement or investment accounts and insurance policies.

Inventory your home. List items by value as well as any sentimental pieces.

Consider finding a reputable divorce lawyer, whether you plan to go to court or mediate. A divorce involves several contracts, and legal expertise can be helpful.

Evaluate your budget. You may have increased living expenses, including rent or a new mortgage, as well as a change in tax status. Take stock of your assets and debts, too.

Create new legal personal documents, including a will and power of attorney.

Research life and health insurance options. If you are on a spouse's policy, you will need to find your own coverage.

Do not sign anything until you have time to evaluate its immediate and future impact.

Focus on the future. Be sure to take care of yourself and ask for help when you need it.

Your State Farm agent can help you navigate insurance and financial decisions throughout the process.


The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.

Neither State Farm® nor its agents provide tax or legal advice.

Start a quote

Select a product to start a quote.

Find agents near
you or contact us

There’s one ready to offer personalized service to fit your specific needs.

Related articles

What is a will and why do you need one?

A will is a legal document that establishes who will receive your assets from your estate and can appoint guardianship of minors.

Divorce checklist

When divorcing there are many considerations such as legal aspects, children, division of wealth, and establishing a different life.

A Decade-by-Decade Approach to Financial Goals

Help take the guesswork out of prioritizing your lifelong financial goals with this infographic that categorizes retirement goals, short-term goals and other financial to-do's by age.

Tips for managing your life insurance after divorce

Getting a divorce? You may want to review your life insurance for these reasons.