Your finances are likely going to change significantly after divorce. This can create a lot of financial stress, but you can alleviate it by budgeting in advance and being prepared.
Everyone’s budget will be unique, depending on their financial situation, their needs and the specifics of their divorce. But below are a few general tips that can help you as you get your finances in order.
Consider the court order
To start with, think about the court order and how it may change your financial picture. If you have been ordered to pay child support or alimony, for instance, that needs to go in your budget. Similarly, if your ex-spouse was ordered to pay and you’re going to receive that support money, you can factor it in.
Reducing your income
But even if you are getting support payments, remember that you are going from two incomes down to one. Focus on your current earning levels, not the lifestyle you have become accustomed to. It often feels like you have less money after divorce simply because you and your spouse used to share costs that you now both have to pay for on your own – such as the rent.
Focusing on necessary payments
The key is to start by determining what things are necessary and that you have no choice but to pay for. Examples include mortgage payments, car payments, utilities, food, clothing and more. Once you are sure that all of your needs are met, then you can consider nonessentials and determine what items or services you can let go of to reduce your costs.
The financial side of divorce is often complex. Take the time to consider your options as you work through this process.