Rebuilding your finances after divorce
Divorce is one of the most challenging and life-altering experiences anyone can go through.


Aside from the emotional turmoil, divorce can be financially devastating. Many people lose half or more of everything they've worked and saved for over the course of their life – their home, savings, retirement, business and other investments.

The process of divorce is also expensive – the combination of court fees, solicitor fees, mediation fees and more can amount to a significant sum.

Once the divorce is finalised, it usually results in a decrease in household income and net worth, meaning separated couples must find a way to adjust to a new standard of living. Organising finances is often the most daunting, emotive and contentious aspect of separation and divorce.

The important thing is to try and stay calm, take stock and seek professional advice – a good financial planner can play a key role during a divorce, helping you to make the right decisions and build a new blue-print for your financial future.

Here are a few things you can do to improve your financial situation significantly postdivorce.

Create a New Monthly Budget

It’s important to get an accurate look at your full financial picture when starting afresh after a divorce. Your household income and expenses will look quite different so it’s vital that you review your finances and adjust budgets accordingly, or you could end up in financial trouble further down the line.

Try to be realistic – it may sound harsh but there’s no point trying to live the life you did before. There’s no reason why you can’t build up to that again but to start with, you’ll need to make changes and that will likely mean cutting back.

Reduce or eliminate Expenses

The likelihood is you simply won’t have room for certain expenses in your budget anymore, or at least not at the level you were spending before. While you’re working on rebuilding your finances post-divorce, take a look at what unnecessary expenses you can cut or reduce.

Make sure you analyse them subjectively however – while a gym or yoga class membership may not seem essential to some, if it’s something that is important to your health and wellbeing then it may well be worth it to help get you through this difficult time.

Re-build an emergency fund

For many people, divorce wipes out all or much of their savings, but one of my key bits of financial advice, whatever your situation, is to always have an emergency fund of between three to six months of expenditure. If this has dwindled following divorce (or perhaps was never there in the first place) then make this a priority to build back up, bearing in mind the new financial situation you find yourself in.

Set new financial goals

Take time to assess what you now want financially. No doubt previously, you will have set goals together with your partner but this is now a time to reflect on what you might like for your own financial future.

Ask yourself what you want your life to look like one, five, and ten years from now. What goals would you like to accomplish that would allow you to live your dream life?

Plan for your financial future

Anyone going through divorce will be forgiven for taking one day at a time and not choosing to focus on the future too much. However, when it comes to finances, it is important to think about the long-term.

Building a secure financial future is even more important when you’re going it alone, which means you need to look at your pensions and investments and what your retirement might now look like. Are you still on track to meet your retirement goals and, if not, what adjustments might you need to make to help you achieve them?

Divorce is a difficult time but when it comes the financial side of things, you really don’t have to do it alone. Hiring a financial adviser with the expert skills to help you through the transition can help take some of the stress and pressure off, so you can rebuild your future and start a new life knowing your finances are in order.

Eloise Hammond is a financial adviser with a wealth of experience in post-divorce financial advice. Contact Eloise on:

 01892 770 077
 eloise.hammond@sjpp.co.uk

Eloise Hammond | APFS
Chartered Financial Planner

SeventySeven Wealth Management Ltd is an Appointed Representative of and represents only St. James's Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority).

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