Marriage is not easy.  (Can I get an AMEN?)  Marriage takes a lot of work, a lot of sacrifice, and a lot of compromise.  Couples must find a way to bring two separate worlds together, and that means finding common ground on everything from having children, to where you spend Thanksgiving. 

Susan and I have been working on our marriage for the last 17 years, and while there is still much work to be done, we’ve managed to find that common ground in a lot areas, especially in the area of finances.  As I’ve probably told you before, because I am a financial planner, Susan relies heavily on me to “keep the books,” and as long as our marriage remains intact, things work out okay.  But what if things don’t work out?  What if the two of us get to the point where we don’t agree on anything other than the fact that our marriage is not working?

It’s hard to imagine, but the reality is that many marriages will end in divorce.  Not only does divorce cause emotional damage, but quite often there is financial damage as well.  Many households, like mine, rely on one spouse to manage the finances.  This leaves the other spouse vulnerable to a great deal of financial stress should the marriage ever dissolve.  Sadly, I’ve taken a few calls recently from spouses who are in the process of getting a divorce, but they are not sure how to prepare financially for the separation.  If you ever find yourself in this situation, there are a number of steps you may wish to take in order to establish your financial independence:

1.       Establish accounts in your name.

Until now, your financial life has included another person. That will change, so begin getting used to managing your finances on your own.   Start by opening a checking account in your own name and move your direct deposit from payroll into it.  Also remember to transfer any automatic bill payments to it as well.

2.       Create a budget.

When the two of you were together, you may have enjoyed a lifestyle that you may not be able to afford on your own.  Create a budget based on your income, and consider making changes to your lifestyle so that you don’t end up spending more than you make. Here is a simple budgeting spreadsheet,, along with an article on money management tips,, to help you get started.

3.       Pull your credit report.

Using credit cards or taking out a loan to buy a car may have included you cosigning on the agreement.  Now that you are splitting up, you’ll want to separate any outstanding debt.  Go to and request a copy of your credit report from each of the three major credit bureaus.  Contact all of the creditors you have a joint account with and establish a new account in your own name.  If your separation is amicable, decide how much debt belongs to each of you and transfer your portion into your account.  Otherwise, you’ll still be responsible for any outstanding balance on existing debt, even if the divorce decree says that it belongs to the other person.

4.       Decide how to split non-financial assets.

It’s one thing to split up financial assets like a checking account or brokerage account, but it’s something entirely different to have to divide things like your home, vehicles, and furnishings.  Take an inventory of what the two of you have and assign a monetary value to each item.  As you decide who will get what, try to distribute the assets in an equitable fashion.  If you cannot equitably distribute all of the assets, you may have to sell some and simply split the proceeds.

5.       Contact your insurance providers.

After the assets are divided, you should contact your insurance agent in order to have new insurance policies written on your car and home (if applicable).  You should also check with your human resources department as you will want to make sure you understand how a change in your marital status can impact your health insurance.  After all, you don’t want to pay for insurance coverage you don’t need any longer.

6.       Review your estate plan.

A change in marital status should be an event that triggers a review of your estate plan.  Begin with a review of the beneficiary designations on your life insurance, 401(k), and IRAs.  Follow that up with a review of your will and/or trust and make any updates as needed.  Next, look over your financial and healthcare powers of attorney and finish with a review of your healthcare directive.

Going through a divorce is painful enough.  Don’t make it worse by neglecting to establish your financial independence.  Take these preemptive steps to ensure that you land on your financial feet.