Navigating finances after a divorce can be hard. 

You just went through one of the toughest experiences a person can go through, and now you must reorganize your life. You may have to move, lose (or gain sole) custody over your children, and start over in other ways.

All of this can make for an emotional rollercoaster, the stress of which is only made worse once you throw finances into the picture. After all, your financial situation will look much different all of a sudden.

According to a report by UBS, only 20% of couples participate equally in financial decisions. If you didn’t handle finances while married, you will need to now. And even if you did, you’ll face new financial challenges.

But there is hope. You can recover from a divorce emotionally and financially. It just takes careful readjusting. Use this time as an opportunity to redesign your financial life. Here’s how:

1. Get organized

The first thing you should do after a divorce when it comes to finances is get organized. 

Make a list of what you own. This can include houses, cars, cash, bank accounts, investments, and more. The point is to get clear on what’s yours and what no longer is.

From there, you can make more informed financial decisions for yourself and any dependents.

2. Update your budget

Your income and expenses may change dramatically after divorce. So it’s important to create a budget that helps you live within your means—especially if budgeting is new to you (because you never did it when married, for example).

Divorces can cost a lot in legal fees all on their own, so factor these short-term costs into your new budget. Depending on how the divorce settles, you may also owe or receive child support or alimony. If you relied on your spouse’s income while married, you may not have less income to work with. All of this can have a major impact on your budget. 

Whatever you do, try to keep your expenses below your income. Otherwise, you could quickly fall into an unsustainable cycle of debt.

This may require spending less and saving more. So find ways to cut unnecessary costs, e.g. by eating out less, downsizing to a smaller home, or refinancing your mortgage.

Sticking to a tighter budget can be challenging and may require some lifestyle changes. But it’s well worth it. Keeping a budget will put you on firm financial footing so that you can prepare for a bright future.

If you struggle to budget, consider using a budgeting app like Personal Capital or YNAB. They can help automate processes like expense tracking.

3. Evaluate and update your financial accounts

Now that you are single, you may want to close or adjust some of your financial accounts. For example, if your ex was an authorized user on one of your checking cards, you’ll probably want to remove them or close the account.

Evaluate every part of your financial position. This means going over emergency savings, college planning, retirement funding, and estate planning. For example, you may want to remove your ex as a beneficiary on a life insurance policy or redo your will. 

At the same time, you may want to increase your life and disability coverage if you are now the sole provider for your children and can’t rely on your former spouse anymore in the event that you die.

4. Pull your credit report

When you’re married, your credit is often tied to your spouse’s because you tend to share credit accounts (e.g. on a mortgage). Now that you’re divorced, you want to make sure your credit isn’t attached to your ex’s. Otherwise, your ex’s bad credit can hurt yours, and in the worst cases, your ex may try to deliberately sabotage your credit. Hopefully, this never happens to you.

To avoid having your credit negatively impacted by that of your spouse, close any joint accounts or remove them as an authorized user. Then pull your credit report by going to www.annualcreditreport.com, where you can get it for free. Check for any discrepancies or errors and have them corrected if needed. 

From there, you can start building up your credit independently by taking out loans and credit card debt exclusively under your own name. This can set you up for getting approved for better loan terms later on in life.

5. Redefine your financial goals and priorities

Right after a divorce can be a great time to redefine your financial goals and dreams. After all, they may have changed now that you’re single, and that’s okay. 

For example, you may decide to switch careers, go back to school, choose a different place to retire, or stay at home with the kids for a change. The possibilities are endless. Do some soul-searching to see what’s right for you and your kids now that you’re no longer married.

6. Consult a team of professionals

Finally, now is a great time to assemble a team of professionals who can help put you on the right track financially. First and foremost, you should consult a divorce attorney, who can help protect your rights and ensure you and your ex’s assets get divided fairly. 

You should also talk to a financial planner. They can help provide an unbiased view of your financial situation and point out areas you should focus on. For example, they may make you aware of effective tax strategies to pursue or ways to grow your income. 

The same goes for professional accountants and estate attorneys. They can help you find the best financial path forward.

The bottom line

A divorce can leave you in a difficult financial position. However, it can also open up new opportunities. Focus on the positive and try to find the silver lining. What lies ahead could be much better than what you’re leaving behind.

Get your financial situation in order first, and other aspects of your life will likely improve as well.