Investing after divorce is a path to securing your financial future, but for the majority of women, it’s our first time taking the reins. If this is your first rodeo, I have good news for you: Investing is easier and more accessible than we’ve been led to believe. 

Key Takeaways

  • Most women defer investing to their husband, but experience has shown older women why they need to take charge
  • Taking stock of your financial situation will help you build an emergency fund and slay high interest rate debt – the foundations of financial stability today
  • Buy-and-hold investing will help you build future financial security and there are several ways to start easily with small amounts of money

4 of 5 married women defer investing to husbands

Investing after divorce for the first time on your own? You’re not alone. According to this study by UBS Wealth Management, only 20% of married women share equally in investment decision-making with husbands. 

Why? Women in the survey felt that their husbands were more knowledgeable when it came to investing. They also expressed they had limited time or interest to handle it on their own. Of the husbands who led decision-making, 68% of them openly admitted doing so to protect assets in case of divorce.

Married millennial women & investing

Perhaps the most surprising stat from the survey is that only 15% of millennial women shared equally in investment decisions with husbands, even lower than older generations. How could this be for a generation raised on Spice Girls and hell-bent on gender equality in other arenas?

It turns out, millennial couples aren’t an anomaly. Instead, younger women haven’t been confronted quite yet by money lessons that materialize later in relationships, like the ones that come with the hardships of divorce. Older generations of women were more engaged in investment decisions because they’ve experienced firsthand the consequences of being passive. 

So, if you’re beating yourself up about not being more hands-on with your money sooner, don’t be hard on yourself. These statistics are evidence that no one thinks it’ll happen to them until it does. 

Cushion & stability for Current You

Getting your financial bearings after divorce might feel like being locked in a gameshow cash cube, except most swirling bills are replaced by scraps of paper scribbled with account numbers, passwords, and balances. 

Draw your financial picture

Your very first order of business is taking stock of the here and now. To do this, you’ll want to create a clear picture of your assets and liabilities. Assets could be financial, like checking or investment accounts, or they could be real property, like real estate or vehicles. Some of the most common liabilities, on the other hand, are mortgages, student loans, and credit card debt. Knowing the interest rate for each liability will be important. 

You’ll also want to have an idea of how much money you spend every month. This might feel like ripping a bandaid off if you’ve never looked closely, but you’ll thank yourself for doing it after the initial sting.

You’ll use this information to conquer these two prerequisite steps – (1) building an emergency fund & (2) paying down high-interest debt – before you buy your first investment. 

Build an emergency fund

Emergency funds are savings you keep readily on hand for, well, emergencies.

To build one, start with what you have on hand, then work to build your fund large enough to cover up to 5 months of your living expenses. This money is best stored in a safe place where you won’t dip into it as part of your regular spending, like a separate checking or high-yield savings account. Realistically, expect this to take months to build.

Think of this money as the buffer between you and all of the crazy, unexpected things life throws at you. It can mean the difference of covering a major, unexpected expense without taking on credit card debt or selling long-term investments.

Slay high-interest rate debt

Next up, pay down high-interest debt, like credit card balances. Generally, I’d peg “high-interest” to mean any rate at 7% or above, which is roughly the long-term return of the stock market after inflation. You want to pay off high-interest debt first because chances are good you’ll pay more in interest than you’d earn in the stock market with your money.

You don’t need to pay off all debt to invest. In fact, having liabilities with lower interest rates can be a good thing! Choosing to not pay them off frees up excess money to invest.

Once you’ve knocked these two steps out, take a moment to appreciate what you’ve accomplished. If you’ve ever painted a room, you know how much effort goes into the pre-work before you crack open a paint can. The actual painting part – or in this case, the investing part – is easier and more satisfying because of your preparation.

Invest to build a life for Future You

You’ve developed your financial sea legs and have some extra money to invest. Now, it’s time to build a life for Future You. Here’s where long-term, buy-and-hold investing enters the fold.

Extra money to invest often comes in two forms. The first could be a chunk of cash (in excess of your emergency fund) you have sitting on the sidelines, ready to be invested. Or, if you don’t have a lump sum, investing the extra wiggle room in your budget each month is just as good. The more the merrier, but even if it’s just a few extra bucks, you’ll be stunned by the way your money compounds over time.

Read more about How I Reached Coast Financial Independence.

It’s a misconception that you need to have a big pool of money to start investing after divorce. The inverse is true; investing small bits creates the pool.

Choose your account type

The type of account you select is just as important as the investments that go inside. If you’re investing after divorce for the first time, I’d start by considering two general account types: (1) a retirement account or (2) a standard brokerage account. 

Retirement Accounts

Retirement accounts have major tax perks, but like the name implies, you should plan to invest money in them for retirement. Withdrawing money early from a retirement account could come with a 10% penalty. 

The exact tax benefits will depend on the flavor of retirement account you select. Two common ones are 401(k)s and Roth IRAs. (Yes, if you have a 401(k) at work, you’re already an investor!)

By contributing money from your paycheck to a 401(k), you receive a tax deduction now plus tax deferral while money grows in the account. It might not sound like much, but these perks add up to thousands in savings. Plus, taxes aren’t owed until you use the money in retirement. 

A Roth IRA, on the other hand, is like the mirror image. You contribute already-taxed dollars to this type of account. It grows fully tax-free as long as you wait to use it after age 59.5 and your account has been opened for more than 5 years. 

Because your contributions to a Roth IRA have already been taxed, you have wiggle room to access them in a pinch. Contributions are always accessible, tax- and penalty-free to you. Plus, there are special exceptions to make a first-time home purchase or cover college expenses, among others.

Brokerage Accounts

A standard brokerage account, often referred to as a taxable account, can be opened on any online brokerage website. To start, I’d recommend checking out a provider like Fidelity. 

Money you invest in one can be accessed at any time, but brokerage accounts don’t come with the tax benefits of retirement accounts. If you sell an investment that has gone up in value, you’ll owe tax on it that year. Plus, there are no tax deductions for contributing to one. 

Because of their flexibility, brokerage accounts are best for investing for a goal that comes sooner than retirement, or after you’ve maxed-out your retirement accounts. 

Even if your golden years seem far away, it’s never too soon to start saving. Women tend to live longer than men, and on average, we earn less over our lifetimes thanks to the gender pay gap. This makes it much more likely that we outlive our money than have too much of it in retirement!

How do you feel about risk?

Next, reflect on how “risk tolerant” you are. Your risk tolerance determines how much stock or bond exposure you should hold. Generally, investors who are more risk tolerant hold more stocks; conservative investors hold more bonds. 

The amount of time you plan to leave your money invested is the primary determinant of how much risk you should take. For example, if you’re a 35-year-old investing for your retirement years, your portfolio will have ~30 years to do its thing. Because this is long enough to recover from even the bumpiest markets, you can afford to take some risk by investing primarily in the stock market. If you’re nearing retirement, you may want to be more cautious since you’ll have less time to rebound.

Low-cost, diversified index funds

This part might feel anticlimactic if you’ve ever watched Wolf of Wall Street. Mountains of research show that investors are best served by choosing low-cost, diversified index funds instead of active investment managers who try to beat the stock market with their picks. Despite Ivy League degrees and limitless resources, even the best active investors underperform passive index funds over time. 

In fact, Warren Buffet famously delivered this exact advice to LeBron James, when LeBron consulted him for investment ideas. Buffet said, “Through the rest of his career and beyond, in terms of earning power, he should just make monthly investments in a low-cost index fund.” Buffet went on to underscore for Lebron that usually, the simplest approach is best. 

To set yourself up for investing success – and, truthfully, to make your life easier – a portfolio of low-cost index funds to buy and hold is the answer. All you do is select a few diversified investments, like a global stock index fund paired with a bond index fund, and apply a mixture between the two that meets your risk level.

Whether you choose to manage your own portfolio or hire a professional, understanding the benefits of low-cost, passive investing will help you make sound decisions. In a nutshell, it’s how you get lots of compound growth for little cost. 

To DIY or outsource?

DIY Investing after divorce is in your wheelhouse, but seeking professional advice can also be a smart move. Ultimately, your decision should be based on how comfortable you feel investing your money and how complex your finances are. You can manage your investments yourself, use an online robo-advisor, or hire a fee-only financial advisor.


Managing your own portfolio is ideal when you have a relatively straightforward financial situation and you feel comfortable trying your hand at something new. To reinforce my rally cry from earlier – trust me – investing is easier than you’d think. It’s also your most affordable option.

To DIY, most of your work happens at the outset. Doing a little learning, setting up an account, and picking your initial investments takes the most time. After that, especially if you automate contributions, you can get by with checking in on your account monthly. Personally, I’ve managed billions of dollars on behalf of clients, and I review my own portfolios quarterly.

If you opt for the index-fund route, look for low-cost, diversified investments with management expense ratios at 0.20% or lower. On a $10,000 portfolio, this would keep fees below $20 a year.


Robo-advisors are websites that provide professional investment management at a fraction of the cost of traditional financial advisors. Based on your responses to a questionnaire, the robo-advisor’s algorithm will recommend an account type and investment portfolio to you. From there, your portfolio is managed automatically on an ongoing basis.

A robo-advisor might be for you if you have a relatively straightforward financial situation but want the reassurance of having a professional oversee your investments. 

A robo will be more expensive than DIY investing but cost less than a traditional financial advisor. For this type of advice, you can expect to pay between 0.25% and 0.50% of your account assets, on average. This is in addition to the expense ratios charged by any of the funds held in your portfolio, which average between 0.05% and 0.25%.

On a $10,000 portfolio, this is likely to run you between $30 to $75 per year in total fees.

Fee-only financial advisors

You’ll get the biggest benefits from hiring a financial advisor when you have a more complex financial situation that requires ongoing, personalized guidance. Advisors often come with investment minimums and will be the most expensive option. For the right client, however, the benefits can far exceed their cost. 

When hiring one, look for a fee-only financial advisor who focuses on financial planning. Your financial plan will tell you what to do with your money, year after year, to achieve your financial goals. It’s like a roadmap. 

Fee-only advisors (or planners) are fiduciaries who are required by law to provide you with advice that’s in your best interest. Moreover, fee-only advisors tend to be transparent in how they charge for their services. 

In most cases, financial advisors will charge at least 1% of your assets for their work. For an apples-to-apples comparison with the DIY and robo-advice paths above, this will run you about $100 for every $10,000 you invest with them. This is in addition to the expense ratios of investments held in your portfolio. 

A common misconception of working with a financial advisor is they’ll be able to invest your money in a way that outperforms the market. While there are tangible benefits to working with an advisor, beating the market isn’t one of them.

Put yourself first

The classic flight attendant advice applies even to investing after divorce: Put your oxygen mask on before helping others. 

Prioritizing your own financial stability, now and in the future, is one of the best gifts you can give your family. Parents, especially mothers, have a tendency to put our children first, even more so in the face of uncertainty. But, rushing out to pour every extra dollar from your budget into your children’s college savings creates risk for your family if you, yourself, don’t have a strong foundation. 

Remember that providing financial support to family later is always an option. For now, your job is to take care of yourself so you can take care of others later.

Am I doing this right?

First-time investors often second-guess themselves. Is it really this easy, or am I missing something? After all, we learn zilch about personal finance and investing in school, and the financial industry makes it all seem so complicated.

Let me reassure you. If investing after divorce feels easy, that’s a sign you’re doing it right, even if you’re managing your own portfolio. Effective DIY investors buy and hold low-cost, diversified index funds, automate their investments, and periodically check their accounts to ensure things are going smoothly. 

Whatever path you choose – DIY, robo, or fee-only advisor – it’s not permanent. If you jump into DIY investing and realize it’s not for you, hire a professional. If you hire an advisor, find solid ground, and learn a few things, you don’t need to commit to them forever.

Investing after divorce will feel like a slow burn, but bit by bit, your money will begin to compound and grow. With consistency and time in the market, investing after divorce is a way to rebuild your financial future.