A Fair Split: Untangling Finances During Divorce

Divorce is never just about emotions; it’s about practical realities, too. I’m Charlotte, mum of three and Family Lifestyle Publisher. Unlike some families, thankfully, I’ve actually never had to untangle finances during divorce. I have seen, through others, that it’s overwhelming at first. The papers, the numbers, the worry about the future.

But I’ve also seen that when you break it into steps, it feels less like chaos and more like clarity. This guide isn’t about scary legal jargon. It’s about giving you a clear, compassionate roadmap for managing your money during divorce so you can protect yourself and move forward with confidence.

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Pull together all your financial records

Imagine turning up to a divorce meeting with nothing but vague guesses about your income or savings. It’s stressful and stalls progress. Start by pulling together bank statements for all your accounts, tax returns from the past three to five years, payslips, and proof of income. Don’t forget credit card bills, outstanding loan agreements, and mortgage or rent documentation. Having everything in one budget planner or folder (physical or digital) will give you a solid foundation and remove the guesswork.

What to include:

• Bank and savings account statements
• Payslips and P60s
• Tax returns (past 3–5 years)
• Mortgage or rental agreements
• Credit card and loan statements

Take an inventory of assets and debts

Once the paperwork is in order, sit down and list everything that you own and what you owe (for both of you). This includes your home, vehicles, and valuables such as jewellery and art, but also shares, investments (including crypocurrency), and life insurance. On the debt side, make note of credit cards, store cards, student loans, and mortgages. A full inventory avoids surprises later and keeps discussions fair. 

Include in your inventory:

• Assets: property, pensions, shares, jewellery, vehicles, insurance policies, cryptocurrency
• Debts: credit cards, store cards, student loans, mortgages, personal loans

Get accurate retirement and pension fund valuations

For many couples, pensions are second only to property in value. Be sure to check recent valuation statements (this can usually be done online) to understand the current worth of a pension fund. For example, if you’ve paid into an old workplace pension over a number of years, it can be worth more than you expected. Splitting pensions can be complex, so it’s a good idea to work with a solicitor or financial adviser to make sure you don’t undervalue your future security.

Create a post-divorce budget

Life after divorce means a new financial reality for both parties. Draft a budget that’s realistic about your post-separation income and expenses – from rent and groceries to extra childcare expenses and travel. Thinking ahead helps in negotiations around spousal support or settlements. Use budgeting guides to help you structure your plan – using even a simple spreadsheet or basic budgeting app can make the process easier and more accurate.

Things to budget for post-divorce:

• Rent or mortgage payments
• Utilities and groceries
• Childcare and school costs
• Travel and commuting expenses
• Insurance and healthcare
• Personal spending

Lawyers and financial advisors: Get expert guidance

Checklists are useful, but expert guidance is essential during a divorce. Consult experienced divorce lawyers to help with finances so that your rights are protected and no asset is overlooked. Financial advisers can also provide clarity on investments and long-term planning. Together, they help you avoid costly mistakes and give you peace of mind as you move forward.

Financial clarity makes for a smoother divorce

Untangling finances during divorce isn’t easy, but it doesn’t have to feel stressful or impossible. By organising records, valuing assets, setting a budget, and seeking expert advice, you can start the next chapter of your financial life with confidence

FAQs: Untangling Finances During Divorce

What documents do I need to start dividing finances in divorce?
Collect bank statements, payslips, tax returns, mortgage details, credit card bills, and loan agreements.

Are pensions included in divorce settlements?
Yes. Pensions are often second only to property in value and can be split through pension sharing orders.

How do I divide debts during divorce?
Both partners are responsible for joint debts. List all debts upfront and work with solicitors to ensure they’re fairly divided.

What’s the best way to track my assets and debts?
A simple spreadsheet or budgeting app works well. Include everything — property, savings, vehicles, pensions, and loans.

Do I need both a lawyer and a financial advisor?
Ideally, yes. Lawyers ensure legal fairness, while financial advisors help you understand pensions, investments, and long-term security.

How can I prepare financially for life after divorce?
Draft a realistic budget, open a personal bank account if you don’t already have one, and review your insurance and savings plans.

Before You Go

Divorce is one of the hardest transitions anyone can face, but clarity around money can make the road smoother. I’ve seen how organising finances, seeking advice, and planning for life after separation can ease the stress. Remember, you don’t need to do everything in one day.

Step by step, record by record, you’re building the foundation for your next chapter. And that chapter can absolutely be one of stability, freedom, and new beginnings.