How To Recover Financially After Your Divorce

Once the dust has settled, follow these steps to get back on track with your finances.

Get the lay of the land

Before you can find your feet, you need to know exactly what’s going on with your money. That means pulling your head out of the sand and taking a hard look at the good, the bad, and the ugly. It’s common in relationships for couples to settle into different roles, and if your ex handled the finances, you’ll have your work cut out for you while you relearn this skill. But even if you knew your household money inside out, you’ll be facing a whole new financial landscape post-divorce. You’ll be dropping from two household incomes to one. Whatever your specific circumstances, there’s a lot to get a handle on.

So set aside a good chunk of time to figure out a detailed financial picture. This could be a spreadsheet or a giant piece of paper—the important thing is to be thorough. Jot down absolutely all of your mortgage or rent payments, bills, day-to-day spending, loan or credit card repayments, retirement plans, bank balances, and school tuitions (if you have them). Once you have a clear financial picture, you can start to make some decisions.”

Make an emergency fund

If you didn’t receive a payment in your settlement, building this emergency buffer should be your top priority. Make the payments for any debt, but don’t pay anything extra until this emergency fund is sorted. Next, focus on eradicating your higher-interest debt. Then you can move on to saving for retirement and finally paying off your lower interest debt.

Get on top of your credit score

Credit score in good shape? Great! Skip this section. If you have no idea what yours is, use a free service like Credit Karma or Credit Sesame to find out. Ideally, your number is higher than 670.

Some factors that influence your credit score—such as the length of your credit history—are beyond your current control. But there are a couple of ways to build your number quickly and strategically. Unsurprisingly, the most important thing you can do is to pay your bills quickly and on time, with zero balance on your credit cards.

Next, look to increase how much credit you have access to. A smart way to improve your score is to increase the amount of credit you have available without actually using it. You should aim to utilize the least amount of available credit possible.

Visualize your future

This is the fun part. It’s not about the math. It’s about planning how to use money as a tool to build the life that you want.

Once you have that dream vision, work backward. You should be thinking, How do I use money as a tool to get there? What sort of savings goals do I need to make in order to do that? What sort of payoff plan do I need to make for my mortgage?

Make a plan, schedule a monthly money date to track your progress, and make it a good one. Do whatever you need to do to make this routine feel good.