Preparing for Divorce? How to Avoid 5 Major Financial Mistakes

Posted by Adina Laver, Divorce and Relationship Coach

preparing for divorce financially

One of the top three concerns that most people have when facing divorce is finances. Will I have enough to live on? Will I lose everything? Is it possible to maintain my standard of living after the divorce? What I am entitled to if I have not been the primary wage earner? What I am entitled to if I am the primary wage earner? How will we save for our kids’ education with less to go around?

People do not generally get divorced for financial reasons alone, but all divorces have financial implications. Even under the best of circumstances, many individuals and couples have difficulty navigating through financial decisions. In the context of divorce – which is already a highly emotional time – things become even more complicated and can trigger some of the most powerful emotions including fear, mistrust, anger, guilt and resentment.

These heightened emotions can lead people to commit one or more of the following five serious mistakes during the break up of the relationship:

  1. Not advocating at all for a fair share of the assets because you just want out.
  2. Arguing so much about the money that you end up spending an unnecessarily large portion of the assets on legal fees rather than investing it in your future.
  3. Ignoring the financial piece altogether because of fear or shame.
  4. Forfeiting rights to assets because of abandonment.
  5. Being unrealistic about your financial future and either living too richly or living in fear of spending a penny, particularly following the settlement.

So why is it so difficult to make effective and rational decisions about money?

Much of the financial advice out there is relatively simple – but simple doesn’t make it easy to follow because:

  1. Most of us never receive any formal financial education. Instead, we inherit beliefs, assumptions, and practices around money from our family. Regardless of whether these beliefs or practices are healthy, we assume they are absolutely true - and we act accordingly.

  2. We believe it is taboo to talk about money.  In our culture, we rarely have conversation with friends and even family members. We are afraid of not looking intelligent, of being revealed as having made unwise choices, or stirring up shame, jealously and judgement.

  3. Most of us have absorbed cultural messages about “keeping up with the Jones" in one way or another. We make choices about money, not because they are wise or truly meet our goals, but because we want to hold up certain appearances.

  4. Our brains are just not hard-wired to be good at this stuff.

The last one is actually good news. It means that engaging in seemingly irrational financial behavior is actually human nature – not a personal character flaw. 

Tons of research proves this point.  The 2002 Nobel Prize in Economics was awarded to two men, an economist and a psychologist. The two were looking at human decision making under conditions of uncertainty.  Their conclusions, which are supported by a growing body of research in behavioral finance and neuro-economics, help us to understand why it truly is human nature to make seemingly irrational and impulsive decisions regarding money – and we all do it.

What this means is, we can leave the shame and blame behind, stop beating ourselves up for past mistakes and focus our energies on taking steps toward an intentional and positive financial future.  

Here are some positive steps you can take right now to support healthy financial decision-making during and following divorce:

  • Stop judging yourself for the past. You cannot change what has been and living with anxiety about the future only drains energy. Choose to be in the now. Whatever has been in the past, here I am now. How can I make the decisions that will serve me best  - right now?

  • Never make financial decisions when you are in a state of stress. Your neuro biology is affected when you feel threatened or under stress which actually prevents you from being able to make the wisest choices. Do not allow yourself to be pressured to make quick decisions and defer decision-making until you have time to think things through.

  • Find a money buddy. Find a friend, family member or paid professional who can help you make choices. There is no shame in asking for help. Shame persists when we remain in secrecy about our struggles. Be in your strength.

  • Make a commitment not to let emotions around the finances control your divorce process. The divorce is not about the money itself. It's about setting both partners on a path to live a healthy future. Remember that emotionally-charged decisions can cost you in a divorce. Make choices that will enable you and your family to move forward rather than stay stuck in the past.

  • Recognize that financial decisions have short, medium and long term implications and act accordingly.  Do you tend to make impulsive decisions and ignore the long term? Do you focus so much on the long term that you ignore the short term? Set short, medium and long term priorities and then map your financial plan to meet your personal goals.

No matter what your past has been, the only moment that you really control is now.  This makes NOW the best time to  step forward to gain confidence and knowledge about how to most effectively navigate through the financial aspect of your divorce. Knowledge is power and it is available.


Want more emotional support?

Read, The Emotional Rollercoaster, a Guide for Preparing for Divorce

Download Now- Guide to Preparing for an Emotional Divorce




Adina Laver - Divorce and Life Empowerment CoachAs a life empowerment coach, Adina Laver, MBA, M.Ed, CPC helps individuals in transition, particularly separation and divorce, work past the difficult decisions they typically face.   By leveraging individual strengths, Adina helps clients stay true to themselves and their values, especially during times of great pressure and emotionally-charged decisions.  Contact Adina at or click here to schedule your complimentary 30-minute phone consultation.

Sophia Financial Stephanie McCulloughStephanie McCullough is the founder of Sofia Financial, a business that empowers women to make wise financial decisions. Because money is a means, not an end. It’s what money can do for us that is crucial.  Stephanie has worked as a financial advisor for 15 years. She believes that everyone, regardless of income level, deserves quality, objective advice and excellent service. 

Topics: Getting In Financial Shape