Jul 30, 2025
Alex always prided himself on being a disciplined saver. He built a strong career, set money aside every month, and felt confident about his retirement plans. But everything changed after a messy divorce.
Half of his life savings went to his ex, and the rest disappeared into a black hole of legal fees. Now, he’s paying hefty alimony and child support, leaving him with barely $200 a month to save for the future.
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At 50, Alex is staring down a daunting question: How do you rebuild your financial life when you’ve lost everything?
Divorce is already costly — but sometimes it spirals
Alex is far from alone — as many Americans know well, divorce doesn’t typically come cheap. But costs can really spiral out of control, especially when couples can’t agree on issues like alimony, child support or splitting property.
A 2019 survey from Martindale-Nolo Research found the average cost of a divorce was $11,300, and the median cost was $7,000. An uncontested divorce (meaning there are no disagreements on issues such as alimony, dividing property and/or debts, child support and child custody) is far cheaper, averaging $4,100 with a lawyer and just $925 without one (not including mediation fees).
But as the Martindale-Nolo survey found, the more contested issues a couple had, the more expensive a divorce became. Settling a dispute through lawyers — without having to go to trial — cost couples an average of $10,600. But for those who had to go to trial with at least one contested issue, their expenses shot up to an average $20,400. And those with two or more issues ending up being out around $23,300.
And then once the legal aspects have been settled, there’s a whole other host of money issues to deal with. The loss of shared savings, retirement accounts and the equity of a family home can often set your retirement plans back by decades. According to a report from the Center for Retirement Research at Boston College], divorced households have about 30% less wealth on average than continuously married households, even after accounting for age, education, and income level.
It’s no wonder Alex is feeling some stress over how to move forward — but it’s not entirely hopeless.
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How to rebuild after losing your savings
It might feel impossible, but financial recovery is achievable with a focused plan. Even if you’re working with a much smaller income, there are concrete steps you can take to stabilize your finances, rebuild your savings and slowly regain momentum toward retirement.
Adjust your lifestyle and budget:
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- Create a lean budget that includes savings, even if it’s just $100 to $200 per month.
- Prioritize avoiding new debt.
Downsize where possible:
- Housing and transportation are the biggest budget drains. Consider selling a home that’s too large or downsizing your car.
- Explore creative arrangements like “bird nesting,” where parents rotate living in the family home to save costs.
Increase your income:
- Negotiate a raise or look for a better-paying role.
- Add a side hustle or part-time job to boost savings.
Rebuild your emergency fund first:
- Aim for 3 to 6 months of expenses in a high-yield savings account before investing.
Reassess your retirement strategy:
- Max out employer retirement contributions if available.
- Consider catch-up contributions. At age 50 and up, you can add an extra $7,500 per year to your 401(k).
And there's no harm in seeking professional advice, especially if you're feeling overwhelmed. A financial advisor can create a roadmap to get your retirement back on track.
Alex’s story is tough, but it’s not the end. Rebuilding after a financially devastating divorce takes time, discipline and a willingness to adapt. By cutting back, seeking new income and committing to even modest savings, it’s possible to regain stability and reclaim your financial future, one step at a time.
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Rebecca Payne has more than a decade of experience editing and producing both local and national daily newspapers. She's worked on the Toronto Star, the Globe and Mail, Metro, Canada's National Observer, the Virginian-Pilot and Daily Press.
