It’s no secret: divorce can cause major financial problems.

But you can mitigate many of these problems by taking certain steps in the early days of your divorce. Here’s what you need to know.

It’s all about record-keeping. 

The very first thing you should do if you’ve been served with divorce papers is to get all your records in order. Do it fast, before your spouse attempts anything which might make these records difficult to access.

If you know you’ll be filing for divorce, take this step before you serve anyone any papers.

Dividing assets and liabilities is one of the biggest tasks of any divorce action. Without a clear picture of your marital property, you might end up walking away with far less than you’re entitled to.

You may also lose the ability to make realistic settlement offers, which can save a lot of time and money while the divorce is in progress.

Handle joint accounts correctly. 

Close joint credit accounts right away.

Joint bank accounts are a little harder. Ideally, you and your lawyer will prompt the court to issue an emergency order which specifies when and how the money may be used.

Sometimes, judges will prevent both parties from using the account, however. It may be a good idea to withdraw half the funds prior to filing, to allow your spouse to withdraw half the funds after, and to shut down the account.

If you withdraw more than half and spend that money on anything other than household expenses the court may adjust your divorce settlement accordingly, giving your spouse a greater share of other assets to compensate.

And then stay out of your spouse’s accounts…even if you still know the passwords.

Take a deep breath.

Allowing your divorce to dissolve into open warfare is one of the fastest ways to spend money you’d probably rather not spend.

Remember, in California, all divorces are no-fault divorces. It doesn’t matter what your ex did, how terrible he or she is, or why the divorce is happening.

The purpose of the divorce is not to punish either party. It is simply to divide up the marital assets and liabilities according to California state law.

In fact, a good divorce attorney can even predict the worst case and best case scenario, which means you can focus your efforts on working your way to a settlement that is realistic given these two scenarios. You can do it dispassionately, without arguing about things that don’t matter or spending money to fight when it’s not worth it to do so in the long run.

Consider a new retirement strategy.

Divorce decimates retirement accounts. You may need to save more aggressively over the coming years if you want to stay on track.

And if your spouse was the one filling the retirement account through his or her job, make sure your divorce decree addresses it, and that you get the proper Qualified Domestic Relations Order (QDRO) that will allow your spouse’s plan to disburse funds according to the laws and regulations governing the plan.

Adjust to your new lifestyle.

Your budget is going to shrink. It’s a good idea to plan for that from the moment the paperwork is filed.

Even if you get child support or spousal support, you’re not going to be able to maintain your current lifestyle in most cases.

If you achieve peace with this now, and plan ahead, you might still be able to achieve something close to your old lifestyle. But adopting a realistic view is the first step in making that happen.

Get a lawyer.

Attempting to represent yourself in a divorce is the ultimate in “penny wise, pound foolish” behavior.

People who try to DIY their divorce often end up in a state of financial ruin because they make costly mistakes. Sometimes it’s possible to fix those mistakes later, but it always costs more than doing things the right way the first time.

See also:

How to Handle Joint Accounts in Your CA Divorce

5 Ways to Lower the Cost of Your Orange County, CA Divorce

5 Ways to Make Your Orange County Divorce Process Go Faster



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