A Woman's Guide to Conquering Financial Inequality in Divorce

• The stark reality of financial inequality
• A surprising statistic: Women and divorce initiation
• Crafting a financial strategy for a smart divorce
• 3 ways to get the financial information you need
• Working with a CDFA: Alma’s story
• Working with a real estate strategist: Natalie’s story
• Tips for making big financial decisions
• How Hello Divorce can help

As the founder of Hello Divorce and a seasoned lawyer, I've witnessed the complexities of the divorce process, especially the financial challenges women face. My mission in creating Hello Divorce was to bridge the justice gap and offer a more equitable and simplified divorce experience.

The stark reality of financial inequality

On average, women experience a 41% reduction in their financial status post-divorce, a significantly higher rate than men. This disparity arises from a mix of systemic and cultural factors. Uneven earnings, caregiving roles, longer lifespans, unfair laws, and negotiation dynamics where women often compromise first, rarely to their advantage, all contribute to this inequality. My 20 years in the industry have shown me the need for a service like Hello Divorce, which is designed to level the playing field. 

Ultimately, no one leaves divorce unscathed. Any time you take one household and split it into two parts, there are financial consequences. But that doesn’t mean we can’t set ourselves up to successfully navigate short-term financial burdens and build long-term financial resiliency. 

A surprising statistic: Women and divorce initiation

Interestingly, over 70% of divorces are initiated by women. This statistic is particularly striking considering women are often aware of the financial disadvantages they may face post-divorce. It underscores the necessity for women to have access to resources and guidance that can help mitigate these financial challenges and equip them with strategies to protect and rebuild their financial stability.

Crafting a financial strategy for a smart divorce

A successful divorce starts with a clear financial strategy, a roadmap to not just surviving but also thriving post-divorce.

Understand your financial picture

Gaining a full understanding of your assets, debts, and income is crucial. It’s okay to feel overwhelmed, but taking the time to understand your financial situation is empowering. If you're new to managing family finances, this is your time to learn. Use financial disclosures as a start, and don’t hesitate to seek clarification. 

Read: What Are Financial Disclosures?

Take inventory of your assets, debts, and income

As you prepare for divorce, it’s crucial to get clarity about your financial position. The problem is, the divorce process can make people feel rushed and maybe even flustered. If you weren’t the one to handle the household finances, you may feel at a loss because you don’t have a handle on the basics of your family finances.

Don’t blame yourself for this. Every home has its own division of labor. Some of the smartest women I know don’t know a lot about their own family finances!

Whether by design or by abuse, you may be in a disadvantaged position when it comes to your finances. But in the face of divorce, a solid understanding of your finances is crucial. It’s okay. Now is your time to learn.

• First step: Arm yourself with all of the financial information you can. In most states, financial disclosure is a part of the formal divorce process. Your spouse shares with you the financial information they have about themselves and the two of you as a couple.  You do the same.
• Second step: Once you have the financial information, sit with it. Determine what you still need to get an accurate picture. Sometimes, all that’s needed is more documentation. Other times, a little more digging is required.

3 ways to get the financial information you need

• Simply ask for the information. You might say, “I recognize that you are really clear on our stocks, but I’m just getting caught up and learning. It would be helpful for me to have online access to this account so I can understand what we have.” 
• Avoid an accusatory tone. There’s a delicate balance to be found here. In your quest to get the financial information you need, you don’t want to ramp up conflict with your spouse, but you also don’t want to get steamrolled. Coming at your spouse with, “There should be more money in this account. You must have withdrawn it and spent it on a new car,” won’t score you any brownie points. Try something like, “I need more information to help myself understand the status of this account. How can I view a list of past balances, deposits, and transactions?” 
• Get professional financial help. If you can’t wrap your mind around your financial picture after getting information from your spouse, or if you’re worried that something might be missing, consider enlisting the help of a certified divorce financial analyst (CDFA). Schedule a session with them to go through your questions. Of course if your spouse is stonewalling you every step of the way and you can't get access to any financials, you might want to consider meeting with a lawyer first, to understand your options for forcefully obtaining the information and documentation that you are entitled to. 

A CDFA can provide invaluable assistance in making sense of complex financial details when you’re in the midst of a divorce. Check out our article, What Is a Certified Financial Divorce Analyst?

Working with a CDFA: Alma’s story

Alma's divorce was fraught with difficulty due to her husband's challenging personality. She was concerned about his ability to sway professionals in his favor. 

By working with Hello Divorce, Alma successfully navigated her divorce negotiations, working separately with a Hello Divorce mediator and a CDFA. This approach led to a creative financial agreement that preserved her resources and facilitated a quicker financial recovery than traditional litigation would have offered.

Instead of figuring it all out herself – and drowning in even more overwhelm than she already felt – Alma worked with a CDFA professional who charged a flat rate. She knew how much this hourly assistance would cost beforehand and was able to budget for it – and she spent far less than she would have on a divorce attorney. Her CDFA helped her to review settlement proposals that her husband shared during the divorce process and provide alternative options that focused squarely on her goals - to minimize her out of pocket expenses over the next two years while she gave her new business a go. Ultimately, she asked her CDFA to present her counter-offer to their mediator directly, who then worked with both parties to finalize the details of an agreement. Once the paperwork was wrapped up, they each had a lawyer review their final judgment for extra peace of mind. 

The positive result Alma got with her CDFA is often not achievable through traditional litigation. Plus, Alma likely saved thousands of dollars in legal fees by focusing on resolution instead of battling it out in court. 

Working with a real estate strategist: Natalie’s story

Already divorced, Natalie’s mortgage payments were getting to be too much to handle by herself. Faced with a tough decision regarding her family home, she didn’t know whether to try to keep it and make the steep mortgage payments on her own or do something else. So, she decided to work with a Hello Divorce real estate strategist.

With this professional guidance - including the assistance of a Certified Divorce Lending Professional, Natalie determined that keeping her home for the next several years helped with her long term financial security and provided stability for her children while they finished high school. However, in order to make the payments more affordable, she explored more creative options - everything from Sale Leaseback to Home Equity Investments and ultimately chose the strategy that best worked for her situation.  

Tips for making big financial decisions

Whether you’re thinking about divorce, in the midst of divorce, or facing budget concerns in the aftermath of divorce, solutions are available. Here are some tips on how to find them.

Put your well-being first. You can’t negotiate if you are in a total crisis. If something big is going on – your spouse took the kids against your will, your spouse is withholding funds for your survival, or you’re the victim of domestic violence – consider asking the court for temporary orders. In this situation, a lawyer can help you put the orders in place.

Read: What Are Temporary Orders, and Why Would You Want Them?

Avoid the amount vs. percentage trap. If you’re dividing assets, focus on percentages rather than fixed amounts to guard against market volatility. Some people gravitate toward “certainty.” They might say, “There’s 100K in the 401K. We’ll each take 50K.” The problem with this approach is that divorce can be slow. Markets can be volatile. If something happens between the time you negotiate and the time the judge signs off on your divorce decree, one of you could end up with a windfall if you use hard numbers. 

Use percentages instead. For example, you could say, “I’ll get 50% of this account or 40% of that.” That way, if the market swings up or down, you both take losses or gains, and neither gets a windfall.

Explore every financial avenue. Usually, we think of divorce as just splitting things down the middle. But sometimes, it makes more sense to consider a different settlement option: one where you take (or pay) a buyout of support or take more retirement assets but less of something else. 

Look beyond the obvious solutions. It’s possible to get creative with asset division and even alimony payments. A personalized settlement designed with you in mind is far more beneficial. If this sounds daunting, know that a mediator or CDFA can help you with this.

Explore every avenue of legal representation. Think through your approach. Unless it’s an emergency situation, nothing will happen overnight, and you can take your time. Choosing the right legal path is crucial. It’s a myth that everyone who gets divorced has to work with a divorce attorney. That’s why Hello Divorce was created in the first place. We offer various plans tailored to your needs, combining technology with expert legal, financial, and mediator support.

Control for financial damage. There are multiple ways you could go about your divorce. Your task is to find the way that preserves your best financial interest. You’re more likely to have a positive negotiation experience when you and your spouse are calm, so set ground rules about when and how you will talk about divorce settlement-related issues. 

If you’ll be receiving spousal support, consider taking out a life insurance policy on your spouse as a way to guarantee those funds. Work with a real estate strategist early if you want to consider keeping your home. You might need to repair your credit first or find a creative option – we can advise you on that.

Engage in self-care. This is a necessity, not a luxury. Although 95% of divorces settle, most settlements come with a hefty helping of burnout. Pace yourself. You have more control over the process than you may think.

If you’re thinking of putting your divorce on hold, consider drafting a postnuptial agreement while you’re still married. A postnup cannot be legalized until both of you agree to it. If you’re able to do this, you’ll enjoy more certainty about your financial future. See our Guide to Postnuptial Agreements and Sample Postnup.

How Hello Divorce can help 

At Hello Divorce, we realize that financial and emotional health are intertwined. Our approach focuses on reducing stress and conflict, which in turn leads to better outcomes. 

Tools and checklists

We strive to provide you with access to the resources you need to make informed decisions using tools like our Home Equity Buyout Calculator as well as our team of real estate strategists. We want to provide you with clear, practical advice for your major decisions.

You can also use our many free online checklists in your negotiations to address issues like airline miles and club memberships. These assets, often forgotten by lawyers, can be meaningful and important.

An alternative path

The traditional “lawyer up and fight” method can be expensive, lengthy, and stressful, and it might not be necessary or beneficial for your situation. Hello Divorce offers an alternative path. 

We automate legal and financial logistics, bringing in expert advice only when it's essential. This approach saves money and reduces stress, making divorce more manageable and empowering.

Knowledge and support

At Hello Divorce, we're committed to demystifying the divorce process. We provide the knowledge and tools necessary for empowered financial decisions, helping you navigate this transition with confidence.

We're here to answer questions and help you with your next steps. Click the link to schedule a free 15-minute call with an account coordinator at Hello Divorce.

An ally in your divorce

With Hello Divorce, you're not just navigating a legal process; you're laying the foundation for a secure and empowered future. My experience as a lawyer and a woman informs every aspect of Hello Divorce, ensuring we're your ally every step of the way.

We offer more than just legal assistance; we provide a holistic approach to divorce. From handling the legalities to financial planning and emotional support, we aim to make your journey through divorce less daunting and more empowering.