When people think about divorce, they often consider things like legal fees and court costs. While it is important to plan for such expenses, it is just as important to plan for how your short-term and long-term expenses will change because of the divorce.
It almost always costs more to live as two separate individuals than it does to pool incomes and expenses as a married couple. Moreover, it is common for couples to designate one spouse to handle family finances. If you are not that spouse in your household, you’ll need to gain a financial education as quickly as possible.
Below, we’ve included some tips for getting ready to address the financial changes that will occur during and after divorce.
Make a budget and track spending judiciously
Many of us don’t look too closely at where our money goes – particularly if our spouse was the “money person” in the household. But post-divorce, you’ll be entirely responsible for tracking your own spending and expenses. Therefore, it is important to start now.
This means keeping detailed lists of how much you spend on necessities and what you consider to be “discretionary.” There are dozens of reputable apps and websites that allow to efficiently track your spending, many of which are free or inexpensive to use. Find one you like and use it daily to ensure that everything is being recorded and categorized. Then, use that data to make a budget.
Think of what your plans will be for after the divorce. Ask yourself questions such as:
- Will you be finding a new place to live? If so, how much can you afford in rent or mortgage payments?
- Will you be staying in the marital residence? If so, can you afford the costs of mortgage payments, utilities and repairs/improvements?
- Will you need to purchase your own health insurance policy and/or one for your children?
- How much will childcare cost, and how often will you need it?
- Transportation needs: Will you need to buy a car? If you already have a car but are still paying it off, can you afford to keep making payments?
These are just some of the many factors you will need to consider when creating a short-term and long-term budget.
Work with a skilled attorney for your long-term financial needs
Life after divorce will likely require a tighter budget. But divorce should never mean going into poverty or completely losing financial security. Thankfully, if you hire the right attorney, you can rest assured that he or she will help you pursue a divorce settlement that is fair and sustainable, meeting both your immediate and long-term financial needs.
