Budgeting for Life After Divorce

Review Your Past Spendings

Before you start divorce negotiations, it’s time to take a look at your spending habits. How much money do you need every month to sustain your current lifestyle? The easiest way to figure that out and plan your future budget is to look at the spending records you collected. Make a list of all expenses you can think of and tally it all up at the end.

You might not think of everything right away, but don’t worry. You can always come back later and add more expenditures if you need to. In fact, an online worksheet or money management software could help you keep track of everything. For example, Intuit’s Quicken might be an excellent choice.

Calculate Your Post-Divorce Income

Once you’ve reviewed your expenses, it’s time to see how you will cover them. The most important thing to do is calculate your post-divorce income for each month. That will include your salary, any sort of side income you have, as well as child support or alimony. 

Remember, though — your salary only counts after tax deduction, which is different for married and single people. Be sure to check how your divorce will affect the taxes, as well as how to handle tax exemptions for dependents. You may not be familiar with all the details from the start, but as you move through the process, you need to inform yourself. After all, taxes can significantly impact your available budget.

Once you and your spouse calculate your separate post-divorce incomes, it may turn out they’re not enough to cover the expenses. In such a case, you may feel the need to criticize your spouse, but it’s best not to. Instead, focus on your own budget and try to figure out a solution. If there are any expenses you can live without, take them off the list. Also, if possible, consider taking up a side job to earn some extra money — it’s sure to be useful.

Determine How Much You Spend on Your Children

If you have children, things may get a little more complicated. Naturally, both you and your spouse should be responsible for your children’s expenses moving forward. So to determine the child support amount, you need to identify how much you usually spend on their needs. 

Aside from education costs, food, or clothes, there are several expenses that you can attribute to your children. For instance, if you drive a family-sized car or live in a larger house because of them, you can ask your spouse to cover some of the costs. Be fair when doing that, though. Your spouse shouldn’t have to pay expenses for a regular car you would drive even if you had no children.

A detailed list of expenses that come with caring for children is extremely useful during negotiations. Both you and your spouse should have one so that you can review it and come to an agreement without conflict. When everything’s clearly on paper, neither party has reason to be suspicious of what the money is actually going towards.

In Conclusion

Preparing a post-divorce budget is by no means easy, but it is a crucial step when separating from your spouse. It gives you a degree of control over the divorce process and helps your cause in negotiations. In fact, if you can, prepare several versions of the budget addressing different possibilities, such as selling your house or living with your children. The more prepared you are, the better.

And remember — even though you’re getting a divorce, you and your spouse should work through this together. It may not be easy, but the whole process will be much smoother if you try to be fair to each other. So avoid saying and doing things that could lead to conflict.