Millennial Money: How to Prepare Your Finances for a Breakup

Breaking up sucks, even if it’s necessary and it’s better not to. Emotions weigh heavily and life changes. Your to-do list fills with busy logistics, like figuring out who has the cat or how the hell you’ll afford to live alone.

We don’t know what to tell you about the chat, but we can talk about the financial aspect. After all, sharing can get tricky if you and your partner somehow share money or rely on each other financially.

If you’re married, learn how to prepare your money for divorce. If you’re not married, here are some tips for sorting out your finances.


Breakups are often emotional. These 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 mad at your partner, you can do whatever it takes to quickly leave the relationship. This may mean giving away the cat and a rent-controlled apartment. Or if you are worried about not being financially secure, you can stay in an unhappy relationship.

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


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

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

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

Melkumian asks some of his clients to say these criticisms out loud. Give it a try and ideally you will hear how mean and unfair this 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 for the purpose of “keeping the peace,” says Kaylin Dillon, a certified financial planner based in Lawrence, Kansas, focused on couples and families.

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


Getting organized can help you figure out next steps, Dillon says. Log in to your financial accounts and note the following:

— RECURRING EXPENSES. Distinguish between those you share and those you or your partner pay for 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 VALUE. It’s your assets minus liabilities, or the money you owe, such as debts and loan balances. Save that number too, Boyle says.

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

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


Perhaps this discussion will help you determine next steps. This probability depends on several factors, including the entanglement of your finances and the circumstances of your breakup.

Shared subscriptions are easier to divide than real estate, for example. And it’s easier to collaborate with someone who calmly accepts the breakup, rather than someone who clings to the relationship — or who you can’t stand to watch.

Professionals can help straighten out finances and emotions. They can also bridge knowledge gaps, where one partner knows a lot more about money than the other. Dillon often sees these shortcomings and says whoever knows the least 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 are slowing you down, Boyle suggests a financial therapist. Mediators also help facilitate conversations in a neutral way, Boyle says, adding that her divorced clients often try mediation.

A lawyer can be helpful if you share major assets, such as a house, Dillon says. It may also be worth contacting them if there is a significant disparity between your income and your net worth, and if one partner is financially dependent on the other. (However, Boyle notes that lawyers can be expensive.)

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

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


This column was provided to The Associated Press by 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: [email protected] Twitter: @lauraemcmullen.


NerdWallet: 7 Ways to Prepare Your Finances for Divorce

National Network to End Domestic Violence: About Financial Abuse

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