Few people enter into marriage with an exit plan; most view it as a commitment between two people to do life together. Despite rising divorce rates and a growing awareness of the tendency for over-romanticizing marriage, the concept of life-long legal partnership is still aspirational. However, for those who have witnessed the premature end of their “happily ever after,” the view from hindsight is less idealistic.
Forty-one percent of marriages end in divorce. According to findings from an Equitable report, the disillusionment of their marriage was an unexpected financial wake-up call for many women. Over half expressed profound remorse and shame for not being more knowledgeable and involved in household finances. These sentiments resonate with Kassandra, whose marriage was upended after fourteen years. “You feel ashamed for thinking that things will never get to the point [of divorce], for not considering you would have to do it alone, for trusting your everything to them,” she told ESSENCE. “That’s where the shame comes in.”
In addition to navigating the division of assets, negotiating alimony or child support, and the overall financial restructuring prompted by divorce, the emotional toll of changing a family dynamic is considerable. This makes the necessity of picking up the pieces and re-establishing economic stability that much more challenging. Kassandra, like many women post-divorce, found the experience paralyzing. “In my mind, I was thinking about my action plan, and what I needed to do next,” she said. “But I just couldn’t move.”Equitable’s Chief Marketing Officer, Connie Weaver says this experience is common. “It’s a life-altering event,” she said. “When something like divorce occurs, all of a sudden you’re splitting assets; you’re out there on your own, your circumstances are different.”
For the millions of women facing this crossroads, ESSENCE consulted three experts. Weaver, who supervised Equitable’s report on women, money, and relationships; Kassandra, who successfully navigated the aftermath of divorce and achieved financial stability; and Brandy Mickens, an executive vice president and financial advisor with Equitable Advisors. Collectively, they shared valuable insights and actionable steps for rebuilding financially after a divorce.
Establish an Emergency Fund:
Maintaining a financial safety net offers peace of mind in times of uncertainty. For Kassandra, prioritizing building an emergency fund was a proactive measure that unexpectedly proved invaluable during her divorce. “I’ve always been a saver. I’ve consistently set aside a portion of my paycheck. My whole philosophy behind saving was that one day, it would be a blessing for my family, not for my divorce,” she said. “Little did I know that it would be the main factor in helping me stay afloat when that separation and divorce happens.”
Kassandra’s example highlights the wisdom of saving as good financial hygiene, even when divorce is not on the horizon. You may not know what your “rainy day” will entail.
Make a Budget:
Developing a realistic budget is a pivotal step in financial recovery after divorce. It serves as a tool to align your finances with the new post-divorce lifestyle. Mickens says this involves a meticulous assessment of essential and discretionary expenses, ensuring that every financial aspect is accounted for.
Build or Rebuild Your Credit:
Take steps to build or rebuild your credit score. This may involve closing joint accounts, opening new individual lines of credit, and making timely payments. “It’s a good idea to check your credit score to know where you stand and to see if everything is correct,” Mickens told ESSENCE. “If you catch any errors, call your credit card companies to resolve the issues.” She also stressed the importance of paying bills on time. “It’s key to rebuilding credit. For predictable bills, consider automating payments to ensure you don’t miss any due dates.”
Assess Your Financial Situation:
Begin by evaluating your existing financial situation. Understanding your financial picture clearly is vital for informed decision-making. Focus on resolving the most urgent issues first. In Kassandra’s case, critical home repairs were the immediate priority, like the leaking roof she discovered. “Then, I started calling the banks to separate accounts,” she recalled. “You just handle one thing at a time.”
This sort of ‘first things first’ focus is an intrinsic quality for many women, and the data supports it. The Equitable report indicates that women are initially motivated by immediate financial needs, but their level of engagement evolves, particularly with changes in relationship status. “Many women aim to control what they can,” Weaver said. “They immediately assess necessities, focusing on the basics. However, this short-term approach must be balanced with a longer-term perspective.”
Consult a Financial Advisor:
Seeking the support of a financial advisor significantly increases the likelihood of economic security. The study shows that women who work with financial professionals are twice as likely to feel secure in retirement. Still, despite that advantage, only 20% of women currently seek financial counsel. However, Mickens says, a competent financial advisor provides valuable guidance by attentively listening to your unique circumstances.
Update Legal and Financial Documents:
Review and update your legal and financial documents, including your will, insurance policies, and property deeds. Mickens emphasized the importance of accurately updating these details to reflect your current circumstances. “Remember to change your beneficiary designations if your ex-spouse was previously listed,” she advised.
Plan for Long-Term Goals:
“As you rebuild financially, don’t neglect your future. Build a financial plan that maps out both your short- and long-term goals for this new chapter of your life,” Mickens said. This includes adjusting any savings and investment plans to align with your new circumstances, developing a strategy for retirement, and potentially consulting a financial advisor. Mickens also encourages women to avoid being hard on themselves. “Divorce is a very emotional process, and the financial decisions that result from it can be daunting, especially for women who previously were not involved in managing their household finances,” she said. “Give yourself some grace and then take the time to think about what’s important to you financially. This will empower you to create a sound financial plan that will ultimately become your financial roadmap for the future.”
Kassandra’s journey through the aftermath of divorce offers valuable lessons for individuals facing similar challenges. Her experience underscores the importance of proactive financial planning and adapting to the new post-divorce financial reality. But, a decade after her divorce, when offering guidance to women in comparable situations, she emphasizes a less tangible yet crucial aspect that played a pivotal role in her recovery: “First and foremost, establish a personal relationship with God and rely on it wholeheartedly. Even when you make mistakes, He will meet you where you are.”