One of the most dramatic changes in post-divorce life is your budget. Change is never easy, even after a simple, no-fault, uncontesed divorce, but we have some tips which will help you plan ahead.
Begin with creating a list of all your income. This would include income from your job, second job, consulting, welfare, unemployment compensation, and side business. You might want to think about how to generate additional income, which could be anything from babysitting to selling items on eBay. Also, don't forget to add items such as child support, alimony or a lump sum from a settlement agreement to your income. Make sure that each item you add to your list is something you can absolutely count on. Be careful; don't add items such as overtime and bonuses since they are not a solid factor. Remember that unemployment compensation is temporary, so be prepared.
Next, figure out what your expenses are. Begin with your fixed expenses, items you know you have to pay each month. This can include: mortgage/rent, utilities, insurance (car, health, life), food, credit cards, fuel costs, education, phone, memberships, internet and clothing. Afterwards, take a look at your fluctuating expenses. Items in this category can include: entertainment, purchases from convenient stores, food or soda from vending machines, movies, Starbucks, video games, bottled water and music. Many items in this category fall under what you want versus what you need.
Usually people do the above two steps for only one month. Try to go back and figure it out for the last three months. If you only pay car insurance once per year, for example, then make sure to go back that far and include it as well. Divide that yearly cost of the car insurnace and divide it by 12. This will give you your monthly cost of the car insurance so you can budget accordingly. This will give you a more accurate picture of your monthly expenses.
Now is the time to look to see if your income can meet your expenses. If your income is less than your expenses, then it would be wise to consider areas where you can trim your budget. Here is a list of how you can trim some of your expenses and move towards a balanced budget:
- Put away your credit cards and save them for emergencies only.
- Start packing your lunch and snacks to take to work. The convenience of a vending maching or fast food adds up very fast.
- Pay bills on time, avoiding late fees and a bad mark on your credit score.
- Buy food in bulk, eat less meat and grow a garden.
- Make a list before shopping and stick to it. Don't buy impulse foods that you don't need.
- Avoid ATM fees, don't use machines that your bank or the ATM will charge you a fee for.
- Take care of what you have – car, clothes and appliances. Make them last longer and save money that you'd have to spend on buying new.
- Make your own laundry detergent and household cleaners. There are lots of online ideas.
- Use your library instead of buying books and cancel your magazine subscriptions.
- Drive less. Use carpools, public transportation, walk or bike.
- Look into a multi-policy discount. Getting your home and car insurance with one insurance company can save you money compared to separate companies.
- Avoid impulse purchases. Wait 48 hours and see if you still really need it.
The last tip for the day is to make sure to overestimate expenses. Don't write down exact amounts, round up when it comes to expenses which can give you a small cushion. It's beter to have a little more money in your account at the end of the month than to have too little money and be caught in a bind.
You should consider having a marital settlement agreement prepared as part of your divorce. After figuring out your income and expenses Attorney James Cairns can prepare a martial settlement agreement for you that will be file with the court and incorporated into the final divorce decree. This legal document can spell out who is responsible for what expenses, debts and payments, and include alimony and child support. To get started call Attorney Cairns at 888.863.9115 or click on the words DIVORCE WIZARD for an immediate free virtual consultation. The Divorce Wizard will analyze and qualify your case for an online Pennsylvania divorce, calculate your legal fees and let you file your case immediately. It's just like sitting in our office for a free consultation.