Transitioning from a dual-income household to a single-income household after a divorce calls for accurate and detailed expense tracking. Figuring out your post-divorce budget is critical for living within your means and avoiding financial hardships.
Our team will work with you on your post-divorce budget. This budget will serve as a guidepost for when we negotiate alimony, child support, and the division of assets and debts.
How do you budget for your post-divorce life on a single income? Take these steps so you do not struggle financially.
Gather Accurate Information Regarding Monthly Income and Expenses
As we prepare a strategy to negotiate, we will ask for ALL of the details of your anticipated post-divorce budget, including a detailed breakdown of your monthly income and expenses. We will use pay stubs, investment income, and any other incoming cash you receive. If you do not regularly track your expenses, then we will ask you to track receipts and go through credit card statements. Typical expenses can include:
- Rent or mortgage payments
- Utility costs
- Groceries
- Transportation
- Existing loan payments
- Personal care
- Entertainment
Sometimes we talk about adjusting lifestyle expenses so you live within your means, possibly just in the short term, so you can reach your post-divorce financial goals.
Consider Your Children’s Expenses
When you share children with your ex, the cost of caring for them becomes vital for determining alimony and budgeting properly. You and your spouse will both share financial responsibility for your children based on the number of overnights the children stay with each of you. Think about how much you spend on your children each month. These costs may include:
- Daycare programs
- School lunch plans
- Extracurricular activities and hobbies
- Tutoring programs
- Medical care
Your lawyer can negotiate a settlement based on your custody agreement so your children are cared for in a way that is financially reasonable for both parents.
Plan for Educational Costs
No matter how old they are at the time of your divorce, it’s important to include college tuition agreements for your kids in your settlement. Figuring out a plan for your child’s education in advance can save you and your co-parent financial headaches down the road and ultimately set your child up for a successful future.
It’s not just children’s educational costs that come into play. Do you anticipate taking some courses or earning a degree so you can bring new skills into the workforce? Research the cost of advancing your education and account for this in your post-divorce budget.
Set Aside Emergency Funds
An important part of financial planning after divorce is preparing for the unexpected. What would you do if your car suddenly broke down and you had to pay thousands for a new one? Would an urgent medical crisis put you into debt?
Establish an emergency savings account and commit to putting a little bit in it each month. This account will build over time, so you eventually accrue enough to cover six months of your living expenses. Having this safety net will give you peace of mind should you lose your job or face some other financial hardship.
Team Up With a Trusted Divorce Attorney
Creating a post-divorce budget will help you move on from your marriage and be financially independent. Approach this process with the help of Karen Ann Ulmer, P.C. Contact our family law firm at (866) 261-9529 or submit our online form to schedule a consultation.
