Divorce is one of life’s most emotional and financially complex transitions. As your life changes, your financial picture shifts with it, requiring a fresh look at your goals, responsibilities, and long-term outlook. Whether you’re navigating this new chapter solo or co-parenting, establishing a clear financial direction is one of the most important steps you can take.
At Concerto Financial, we understand that post-divorce planning isn’t just about spreadsheets and budgets. It’s about creating a foundation that reflects your current life, values, and vision for the future. Let’s explore how to begin setting financial goals after divorce in a way that helps you feel informed and supported.
Why Financial Planning After Divorce Matters
Divorce impacts nearly every aspect of your financial life. From asset division and income changes to new expenses and tax implications, there’s a lot to manage. While the legal proceedings may be over, the real work of financial reorganization often begins afterward.
Post-divorce, financial planning matters because:
- You may be managing household expenses on a single income
- Retirement savings, insurance policies, and estate plans may need to be updated
- Credit and debt obligations may shift dramatically
- You may need to plan for child or spousal support – either paying or receiving
- Emotional decision-making may cloud financial choices
By taking a thoughtful approach to goal setting, you position yourself to better navigate this next chapter with purpose.
Step 1: Assess Your New Financial Landscape
Before setting goals, it’s important to understand your current financial status. This means creating a clear picture of your income, expenses, assets, and liabilities.
What to Include in Your Post-Divorce Financial Snapshot
- Monthly income: Include earned income, child support, alimony, or other recurring payments
- Fixed and variable expenses: Mortgage or rent, utilities, food, transportation, insurance, etc.
- Assets: Bank accounts, retirement savings, investment accounts, property, personal valuables
- Liabilities: Mortgages, credit card balances, car loans, student loans, legal fees
You may want to organize this data in a spreadsheet or work with a financial professional to create a simple balance sheet. The goal is clarity, not perfection.
Step 2: Redefine Your Financial Priorities
Divorce often requires a reevaluation of what matters most to you financially. The goals you had when married may no longer apply, and that’s okay.
Questions to Consider
- What lifestyle changes have occurred or may occur soon?
- Do you want to stay in your current home or consider relocating?
- How do you want to support your children financially (now and in the future)?
- What retirement age are you now aiming for?
- Are there personal goals you delayed that now feel important to revisit?
Prioritization may look different depending on your age and stage of life. For someone in their 30s, paying off debt and rebuilding savings may come first. For someone in their 50s, preparing for retirement while rebalancing investment allocations may be more pressing. (Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss. Asset allocation does not ensure a profit or protect against a loss.)
Step 3: Rebuild an Emergency Fund
Your emergency fund is your financial buffer. After divorce, this becomes even more critical, especially when you may be the sole provider for yourself or your children.
How Much Should You Save?
A common guideline is to aim for 3 to 6 months’ worth of living expenses. However, if you have inconsistent income or dependents, you may want to pursue a larger cushion. Start with a modest goal, like one month of essential expenses, and build from there.
Keeping these funds in a high-yield savings account or other liquid account helps ensure accessibility in times of need.
Step 4: Evaluate Insurance and Risk Management
Insurance needs can change significantly after divorce. It’s important to review all policies and ensure you’re adequately covered without overpaying.
Key Areas to Review
- Health insurance: Are you covered under an employer plan or do you need to seek coverage elsewhere?
- Life insurance: You may be required to maintain a policy for child support or alimony obligations. Be sure to update beneficiaries.
- Disability insurance: Especially important if you’re now the primary income earner
- Property and auto insurance: Ensure policies are titled correctly and provide the coverage you need
Risk management is about protecting what matters most. A financial professional can help you identify and evaluate gaps in coverage.
Step 5: Create a New Budget Aligned With Your Life
Budgeting post-divorce is not just about cutting costs. It’s about allocating your resources in a way that reflects your goals and responsibilities.
Consider These Budgeting Tips
- Track spending for a month to get a realistic view of where your money goes
- Adjust for new costs, like legal fees, housing changes, or therapy
- Use percentage-based budgeting to allocate funds toward essentials, savings, and discretionary spending
- Be flexible since this is a period of transition and your budget may evolve
Budgeting doesn’t mean restricting joy. In fact, a healthy budget makes space for what brings you meaning.
Step 6: Revisit Your Credit and Debt Picture
Your credit score may be affected by joint accounts or debt incurred during the marriage. Even if your divorce decree outlines how debt is divided in your divorce, lenders may still hold both parties liable if both names are on the account.
Steps You Can Take
- Check your credit report from all three major bureaus
- Close joint accounts and remove yourself as an authorized user where appropriate
- Monitor for missed payments, especially on any co-signed loans
- Consider debt repayment strategies, such as the avalanche or snowball method
Rebuilding your credit takes time, but it’s a foundational part of your post-divorce financial life.
Step 7: Adjust Your Long-Term Planning
While short-term stability is key right after divorce, long-term planning is just as important. That includes retirement, college savings, and estate planning.
Retirement and Investment Planning
You may need to:
- Rollover retirement funds received via Qualified Domestic Relations Orders (QDROs)
A plan participant leaving an employer typically has four options (and may engage in a combination of these options): 1. Leave the money in their former employer’s plan, if permitted; 2. Roll over the assets to their new employer’s plan, if one is available and rollovers are permitted; 3. Roll over to an IRA; or 4. Cash out the account value
- Adjust your investment strategy to reflect your current risk tolerance and time horizon
- Review contribution levels to IRAs, 401(k)s, or other employer-sponsored plans
- Consider whether to work with a financial professional to create or update an investment strategy that aligns with your needs
Estate Planning
Divorce often calls for an update to:
- Your will and power of attorney
- Health care proxy
- Beneficiaries on retirement and life insurance accounts
- Guardianship designations for children
Taking care of these legal documents helps you maintain control over how your assets and care will be managed in the future.
Step 8: Set Realistic, Actionable Financial Goals
It’s easy to feel overwhelmed, so breaking your goals into manageable steps can make a world of difference.
Use the SMART Framework
Set goals that are:
- Specific: “I want to build a $10,000 emergency fund”
- Measurable: “I’ll save $500 per month”
- Attainable: “I’ve adjusted my budget to allow for savings”
- Relevant: “This helps me feel more financially stable”
- Time-bound: “I’ll reach this goal in 20 months”
Start with one or two goals and build momentum over time. Celebrate progress. Small wins compound into major changes.
Step 9: Seek Professional Financial Support
While many aspects of post-divorce planning can be tackled independently, working with a financial professional can help provide clarity and structure. You don’t have to go through this alone.
How Concerto Financial Can Help
At Concerto Financial, we work with individuals navigating financial transitions like divorce. Our approach is personal, thoughtful, and designed to reflect your life today while helping you plan for what’s ahead.
We aim to:
- Collaborate with you to understand your priorities
- Offer strategies to help you manage risk, pursue growth, and balance financial responsibilities
- Coordinate with legal and tax professionals as needed
- Support you through the emotional and financial complexity of this life change
Our goal is to help you feel informed and supported as you shape your financial future in a way that feels right for you.
Step 10: Give Yourself Grace
Lastly, it’s important to acknowledge that financial goal setting after divorce is not just about numbers. It’s about rebuilding, healing, and rediscovering your voice and your values. Progress may not be linear, but with consistent effort, you can move forward with resilience.
Every step you take, no matter how small, helps you create a foundation for a life that’s aligned with who you are now.
Your New Chapter Starts With a Plan
Divorce may feel like an ending, but it’s also an opportunity to reshape your financial life in a way that aligns with your personal goals. By starting with a clear financial picture, redefining your priorities, and setting realistic goals, you lay the groundwork for a more confident and balanced future.
If you’re ready to begin this journey, Concerto Financial is here to support you. Let’s work together to build a thoughtful financial strategy that reflects your values, responsibilities, and goals. Schedule your consultation today and take your next step with clarity and confidence.
Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC. This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual