Who Loses Money in the Divorce?

No one wins in divorce. This is especially true when it comes to the money. Everyone comes out feeling like they are worse off financially than before they started.

Beyond the attorneys' fees and child support payments, your finances will change throughout your divorce process and afterward. Even if you are awarded alimony or child support, those don't last forever. And if you didn't have a prenup, there will be a lot of unknowns about your financial security.

In general, assets and debts in divorce are split equitably or equally. No, these aren't the same. If things are split equitably, it means that you each get what is "fair." If they're split equally, it is literally 50/50. You'll need to talk to your attorney about what your state's laws say so that you can be prepared for this.

Divorce affects the finances of men and women differently. Overwhelmingly, the standard of living for women goes down much more after divorce than for men.

In order to manage this, your budget will be very important. You need a plan. Going from two incomes to one is tough. If you don't work outside of the home, this can be scary. There is less money coming in, but a budget will help you get a grip on your finances and start building for your future.

Your credit can take a hit during a divorce. So, get ahead of it at the beginning. You need to run a credit report on yourself. This is a quick top-down view of your finances. Hopefully, there will be nothing on your report that is unexpected, but if there is, talk to your attorney about the discovery process and how this will be addressed. Knowing your finances inside and out is priceless in your divorce.

Your housing costs will change. The family home can be sold, and the equity distributed to each spouse. One spouse could buy the other one out of the mortgage. You may decide to take the house in the divorce, assuming the mortgage or refinancing altogether. This can get sticky, so make sure you know the pros and cons of home ownership after a divorce before making this big money move.

Think about all of the other expenses and areas where your finances are tied to your spouse: taxes, retirement accounts, and insurance. Detangling your finances won't be easy. But protecting your money, your identity, and your technology will be a key step in making sure that you come out of your divorce financially intact.