The hardships of divorce come with the hope that the future will be better. If you look forward to a better life after your divorce, you may be concerned about how to avoid financial struggles that are common after a marriage breaks up. Like many married people, you may have become accustomed to the comfort of combined incomes, and now you have to accept the fact that you must make some changes.
Your first step in planning for your new financial reality is to set up and implement a workable budget. There is no substitute for the control over your money that a budget can provide. If you have never used a budget in the past, the months before your divorce is finalized are important for building good habits.
Setting up a budget
The last thing you want is for your post-divorce life to become a drudgery of working to barely make ends meet with no time or money left for life’s enjoyments. To avoid this, you may wish to take an inventory of your income and expenses. Total up the amount of money you earn, after taxes, then compare it to your regular expenses like:
- Mortgage or rent
- Car payments
- Car insurance
- Uncovered health care costs
- Utilities such as electric and gas
- Cell phone, cable and internet
- Gas and vehicle maintenance/repair
You may also have other fluctuating expenses, such as these:
- Gym membership
- Haircuts or styling
- Club fees
- Your morning coffee or lunch out
Don’t forget to include child support or alimony if you expect to pay it or receive it.
Your financial goals
The goal, of course, is to have money left over when you compare what you make with what you spend. If this doesn’t happen, you can try spending less or making more. You may be able to suspend some of your luxuries or find ways to make extra money, such as freelancing or part-time work. It is also critical to control emotional spending and not to take on any new debt until you are settled and moving past the early struggles of post-divorce finances.
Financial security, post divorce, may rely on a fair and equitable settlement. It is vital that you obtain your rightful share of any marital property and that you avoid leaving the marriage with an inequitable portion of your joint debts. Having strong legal advocacy can improve your chances of a just settlement.