You have had time to deal with the emotional side of your spouse asking for a divorce. You knew it was coming, after all. You’re ready for it. Yes, it is going to be a big change in your life, but you feel confident that you can deal with it.
What you’re less confident about is setting up your budget for life after divorce. You really got used to having two incomes. Can you get by on one? How do you need to change your spending? Do you need to think about debt differently? What are you going to lose or gain during the asset division process?
This can all get very complicated. To help you, here are some post-divorce budgeting tips:
1. Don’t try to wing it
Make a budget. Write everything down. Carefully account for every cent. People often feel so overwhelmed by divorce that they just hope the money side of things works out. It may, but this is also a recipe for financial disaster. Do not make this harder than it has to be.
2. Calculate income carefully
Your base income may be easy to calculate, but don’t forget that divorce can change your financial situation in multiple ways. Are you going to get alimony or will you need to pay it? Will you get child support or do you have to pay that? Consider all of your costs and/or income streams and think about the long-term ramifications.
3. If you have to cut back, luxuries go first
Many people do not realize that luxuries are not necessities. If you have to cut back, that’s where you start.
For instance, maybe you have a gym membership. Would you be better off to save that $75 per month and do some online workouts? Maybe you have cable TV. Would you be better off to save that $100 and use cheap streaming services? If you go through your budget, you will be surprised by how the savings add up when you make little changes.
4. Factor in costs that change
Not all of your monthly bills stay the same. Think carefully about how to budget for things that fluctuate. These could include gas bills, electric bills, heating bills, AC costs, water bills, trash pickup and much more. If the cost changes notably throughout the year, your budget needs to work so that you can afford that cost at its highest, not just its lowest.
These four tips can help you move forward after divorce. As noted, the process can be complex. Make sure you know all of your legal rights and exactly how that process is going to play out.