Your financial situation can change significantly when you get divorced. This is why one important part of the process is creating a post-divorce budget.
Exactly what this budget looks like will be different from case to case, as everyone’s financial situation is unique. But to help, here are a few key areas you want to consider.
Adjusting to one income
Many married couples have two incomes, and it can be a significant change to shift just to one income. For instance, there are many people who want to try to keep their family home after divorce, perhaps refinancing their mortgage. But would you qualify for the same mortgage on one income?
If you have children, your budget needs to include their expenses. This can be more complicated after a divorce because you and your spouse may divide these expenses in certain ways. This is why it’s best to create a budget as soon as possible so that you can consider it when determining how to divide expenses and making your co-parenting plan.
Next, just consider that some of your expenses are actually going to go up after you get divorced. For example, you and your spouse used to share things like utilities, water, home insurance, property taxes and much more. After the divorce, if you both are living separately, you will each have to account for these costs on your own. That means they take up a relatively larger portion of your budget.
Working through the process
It can be difficult to divide your life when getting a divorce, and your finances are just one part of it. Be sure you understand all of your rights and the legal steps you can take as you move through this process.