Make a Budget for Your Divorce

One of the most difficult things about planning for a divorce is putting together a budget for your divorce. Extracting your finances and dealing with a single income instead of a double income can be a daunting task, and it’s made even more difficult by the emotions that run high during a divorce. When you’re planning your divorce, sit down some afternoon and put together a budget so that you’re prepared to handle your finances post-divorce.

Start by taking an honest look at your income.

The first step to putting together a helpful and accurate budget is to take an honest look at your income. Don’t fudge the numbers, or base your income estimate on best-case-scenario but unrealistic estimates. Take an average of your past several months, assuming that there are no changes in your income structure. Don’t count on any income from the settlement, as you won’t know if you’ll have that income until the settlement is finalized and paid.

Evaluate your bare minimum living expenses.

After you’ve determined your income, evaluate your bare minimum living expenses. Don’t look at any voluntary expenses; look at the absolute bare minimum required for you to live. Consider housing, utilities, credit card payments and loan installments. Can you afford the bare minimum? Do you need to find ways to make these numbers change, by downsizing your housing or paying off credit cards to minimize payments?

Consider your voluntary expenses.

After you’ve figured out the bare minimum, take an honest, accurate look at your voluntary expenses. How much do you spend on entertainment every month? Cable television counts as entertainment. How about beauty items, or clothes? Is there a way you can cut back on these expenses, or can you afford them?

Budget for your eating habits.

Eating habits can be some of the trickiest items to pin down on a budget. Most people spend what they have. If you’ve got a choice between cooking what’s in the fridge, or an extra thirty bucks you won’t miss in the checking account, would you cook or would you go out to eat? Take a good hard look at your eating habits. Do you eat out more than you should? Do you buy expensive brands and things you don’t need at the grocery?

Consider ways you can cut back on your eating expenses, but be realistic. It’s not practical to expect you’ll never eat out; you’ve got to budget for a moderate amount of expense, or you’ll blow your budget every single month and it’ll be worthless.

Look at savings and retirement goals.

Finally, take a look at your savings and retirement goals. How much are you putting back every month to meet your financial goals? Do you need to save more? Can you afford to save more with your other expenses?

Be prepared to adjust your lifestyle based on your budget needs and indications.

It may be a simple fact that you can’t afford to live the same after your divorce as you did while you were married. Once you’ve put your numbers down on paper, you may see that you can’t afford your current style, and you’ll have to make changes. Don’t be afraid to make these changes. By taking control of your finances and dealing with the lifestyle changes head-on, you’re taking care of yourself and proving that you can establish a new life for yourself. Don’t avoid the challenge; embrace it, and you might find that your new lifestyle suits you.