Millennial Money: How to prepare your finances for a breakup

Aug 23, 2022, 4:00 AM | Updated: 4:07 am

Breaking up sucks — even if it’s necessary and you’re better off without them. Emotions loom large and life changes. Your to-do list fills up with loaded logistics, like figuring out who gets the cat or how the heck you’ll afford to live alone.

We don’t know what to tell you about the cat, but we can speak to the financial aspect. After all, splitting can get sticky if you and your partner share money in some way or rely on each other financially.

If you’re married, learn how to prepare your money for divorce. If you’re not married, here’s guidance for detangling your finances.


Breakups are often emotional. Those feelings can influence behaviors and decisions, says Alex Melkumian, a licensed marriage and family therapist and founder of the Financial Psychology Center in Los Angeles.

For example, if you’re furious at your partner, you may do whatever it takes to quickly leave the relationship. That may mean conceding the cat and rent-controlled apartment. Or if you’re worried you’ll be financially insecure on your own, you may stay in an unhappy relationship.

A note about that kind of dynamic: When a partner uses money for power and control, they’re entering financial abuse territory. Forms of financial abuse, “include tactics to conceal information, limit the victim’s access to assets or reduce accessibility to the family finances,” according to the National Network to End Domestic Violence. Learn more on the NNEDV website.


If you’re not experiencing financial abuse but feel that emotions are clouding your judgment, first acknowledge your inner critic. That voice “can be really discouraging, judgmental and shameful,” Melkumian says.

Perhaps your inner critic berates you for choosing the wrong person or for buying a car with them, for example.

Your inner critic also “over-exaggerates the importance of every small decision,” he adds. The voice may insist that if you don’t get something just right, your life will be ruined.

Melkumian has some of his clients speak these critiques aloud. Try it, and ideally you’ll hear how mean and unfair that voice is. Or, he suggests asking: “Would you let someone else talk to you or a friend like that?”

Also, beware of sacrificing too much in this breakup in an effort to “keep the peace,” says Kaylin Dillon, a Lawrence, Kansas-based certified financial planner focused on couples and families.

“Your future self is counting on you to think about your best interest,” she says.


Getting organized can help you determine next steps Dillon says. So log into your financial accounts, and note the following:

— RECURRING EXPENSES. Distinguish those you share and those you or your partner pay solo, Dillon says.

— ASSETS. These are things you own that have monetary value, such as a house, car, stocks or bank accounts. Note which assets are in your name, which are in your partner’s name and which (if any) are shared, says Sally Boyle, a Hanover, New Hampshire-based CFP and certified divorce financial analyst.

— NET WORTH. This is your assets minus liabilities, or money you owe, such as debts and loan balances. Log this number, too, Boyle says.

If you and your partner feel you can tackle this exercise together, do so. Schedule time for it, so you can feel mentally and emotionally prepared.

“Your first mediation is at the dining room table,” says Boyle, who’s also the founder of The Better Half divorce planning service. If you’re up for it, address disparities in net worth, she says, and how to handle other tricky situations, like shared assets.


Perhaps this discussion will help you determine next steps. That likelihood depends on several factors, including how tangled your finances are and the circumstances of your breakup.

Shared subscriptions are simpler to split than real estate, for example. And it’s easier to collaborate with someone who calmly agrees to the breakup, rather than someone who clings to the relationship — or who you can’t bear to look at.

Professionals may help straighten out finances and emotions. They can also fill knowledge gaps, where one partner understands much more about money than the other. Dillon sees these gaps often and says whoever knows less is at a disadvantage.

So who can help? If that first step of assessing cash flow is overwhelming, Dillon says a financial planner or budget coach can help you understand your money.

If emotions slow you down, Boyle suggests a financial therapist. Mediators also help facilitate conversations in a neutral way, Boyle says, adding that her divorce clients often try mediation.

An attorney can be helpful if you two share major assets, like a house, Dillon says. They may also be worth contacting if there’s a significant disparity in your incomes and net worths, and if one partner financially relies on the other. (However, Boyle notes that attorneys can be pricey.)

Whether you determine next steps with a professional or not, aim for optimism.

“It’s a hard pill to swallow to say ‘OK, it didn’t work this time.'” Melkumian says. “But there will be another time.”


This column was provided to The Associated Press by the personal finance website NerdWallet. The content is for educational and informational purposes and does not constitute investment advice. Laura McMullen is a writer at NerdWallet. Email: lmcmullen@nerdwallet.com. Twitter: @lauraemcmullen.


NerdWallet: 7 ways to ready your finances for divorce https://bit.ly/nerdwallet-7-ways-to-prepare-your-finances-for-divorce

National Network to End Domestic Violence: About financial abuse https://nnedv.org/content/about-financial-abuse/

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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Millennial Money: How to prepare your finances for a breakup