Whether you’ve been married for two years, ten years, or twenty years, surely your finances are intertwined with your spouse’s, even if you have managed to keep all of your bank accounts, auto loans, and credit cards separate.
Maybe you pay the rent or mortgage and your spouse pays the two auto loans. Or, perhaps you pay all of the housing expenses, and your spouse pays all the insurance, food, and credit cards. Regardless of your existing arrangement, you and your spouse probably “share” the expenses to one degree or another.
If you’re a homemaker or a stay-at-home parent, perhaps you don’t technically “pay” any of the bills, but after your divorce, that’s all going to change. In other words, no matter your current arrangement with your spouse, you’re going to be paying your bills as a single person in the near future. That said, let’s discuss creating a post-divorce budget.
Start Budgeting Today
For a lot of spouses, divorce means drastic changes in their financial situation. With that in mind, we want you to pause and think of how divorce will affect your current situation. Will you have to move to a smaller place? Will you need to drive a less expensive car? Will you be going back to work or school? Will you be paying spousal or child support? Will you need to move to a more affordable area or to be closer to family?
In other words, it’s time to sit down and realistically assess your situation. If you’re bad with numbers, you can ask a trusted friend or family member to help you develop a post-divorce budget. You’ll likely find that unless you’re wealthy and money isn’t an issue, you may need to make some lifestyle adjustments. Often, this means decreasing spending while increasing income – becoming extra smart about money.
Here are some expenses to consider as a divorced person:
- Health and dental insurance
- Auto loans
- HOA dues (for condos)
- Taxes (if self-employed)
- Credit card debt
- Personal loans
- Clothing (for yourself and your children)
- Unplanned expenses (e.g. emergencies)
- Extracurricular activities (if you have children)
- Child support (paying or receiving)
- Spousal support (paying or receiving)
About Child & Spousal Support
If you are planning on receiving child or spousal support or both, we want to give you fair warning: It’s not best to rely on this money because not all spouses pay up on time or as they’re supposed to. For example, your spouse may be ordered to pay child support, but he or she could lose their job and not pay it. We’re just saying, it happens.
Instead of counting on child and spousal support, it’s best to find ways to be self-supporting, especially if you’re not employed at this point in time. The goal is to be prepared in case your spouse fails to follow through with their support payments. This way, your lifestyle and credit won’t take a hit if your spouse fails to hold up their end of the deal – the divorce decree.