Divorce changes more than your marital status. It can alter your address, lifestyle, income and how you file your tax returns – all of which raise budgeting concerns for many newly divorced people. As you untangle your financial accounts and make those final bill payments as a couple, you may be wondering what your budget will look like now that you’re no longer married. Quite a few expenses might be handled differently as a single person:
- Rent or mortgage payments
- Car payments
- Auto, health or life insurance
- Spousal maintenance or child support
Whether you and your ex kept separate accounts, had all joint accounts or used a hybrid model, chances are handling your finances will feel a little different. This can be a particular challenge for the person who wasn’t writing the checks. Facing these concerns can be overwhelming, at first. But if you bite off one piece at a time, getting your finances in order will eventually become second nature. Below are a few tips to get your started on the right foot.
Make a Financial Plan
The first step in creating a financial plan is to determine how much money you will have to manage after the divorce. A good financial plan will factor in all sources of income, as well as anticipated expenses. Once any spousal maintenance or child support has been established, it will be easier to move forward with a plan.
Financial professionals often recommend creating a post-divorce financial budget to see whether your financial goals are achievable. It’s important to stick to the process of financial planning to ensure that your budgeting and goal-setting habits are ongoing. This will help you set priorities and give you an idea of how much money will be left at the end of the month for food, transportation, repairs and other typical expenses.
Budgeting Technology is Your Friend
With the increase in new technologies and online software platforms, it is easier than ever to stay on top of your expenses and keep track of how those hard-earned dollars are being spent each month. Don’t make it complicated. Use whatever works best for you! Whether through a financial app or something else, be sure to get the help you need.
It’s common for people to make small changes to how they spend as they enter a new, post-divorce lifestyle. For instance, you may discover that credit card fees or other charges are keeping you in the red. Closing out one of those credit cards, renegotiating interest charges, or cutting down on discretionary spending may be necessary in the short term as you adjust to your new normal.
Discuss Joint Accounts and/or Debt Issues with Legal Expert
Considering that most marriages start out with debt, it is quite possible that there will be some debt remaining as the divorce proceedings conclude. Sharing things such as debt obligations and joint bank accounts can make it all the more difficult to anticipate your financial situation once all the dust settles.
If your accounts have been combined with someone who has extensive debt, you may be in a financially vulnerable position. Generally, someone in your position won’t be legally responsible for repaying debt of an ex that was built up before your marriage. If a creditor has been in touch with you or you’re concerned about your ex’s premarital debt, these are issues a family law attorney or financial expert can address with you.
Consult Family Lawyer About Asset Division & Other Financial Impacts
When married couples split up, one spouse is often required to pay spousal support (also called maintenance or alimony) to their ex. This can be viewed as a positive or negative, depending on your point of view. There may be other financial questions since combined marital assets will need to be divided up according to state law. A legal separation is an option for couples who want to take a step toward divorce but aren’t yet ready to cross that line.
Rather than making assumptions about how your divorce might impact your pocketbook, a qualified family law attorney should be able to answer your questions. Contact the Law Office of David A. King, P.C. to resolve any aspect of divorce, including financial matters such as asset division and spousal support. We will advocate for your legal rights and help you determine the best path forward.