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What to know about budgeting for life after divorce

On Behalf of | May 10, 2024 | Family Law

From a financial perspective, there’s a lot at stake in your divorce. The results of your property division, alimony, and child support disputes can set the stage for your financial well-being for a long time to come. That’s why before heading into your divorce you should develop a comprehensive legal strategy aimed at securing the financial resources you need to be stable post-divorce.

That sounds simple enough, but figuring out what you need once your marriage dissolution is finalized can be tough, especially if it’s been a long time since you’ve lived on your own. One of the more helpful steps you can take to give yourself a sense of what you need out of your divorce is creating a post-divorce budget.

Why a post-divorce budget matters

Creating a budget seems simple enough, but it can be hard to gather the courage to actually generate one in the face of divorce. Many people are resistant to doing so because they’re afraid of what they’ll find out about their financial positioning, while others simply don’t like the finality of it.

But creating a post-divorce budget is crucial to your success. By creating one of these documents, you’ll have a better idea of your income, your debt obligations, and what you need to live the life you want. As a result, your post-divorce budget can direct you toward those assets you need to advocate for in your divorce proceedings.

Tips for creating an effective post-divorce budget

Your budget will only be helpful if it meets certain requirements. These include:

  • Being realistic: If you inflate your income or what you expect to get out of your divorce, or if you minimize the amount of financial obligations you’ll have once your divorce is finalized, then your budget isn’t going to be very helpful. So, be realistic when looking at your income and your debts, as well as what you think you’ll get out of your divorce. This way you’ll know where you need to focus your efforts.
  • Track your expenses: Our expenses can fluctuate over time, and can be hard to track. By documenting every dollar spent, though, you’ll clearly see where your money is going and where you’re able to cut back. This can help balance your budget and give you some financial breathing room.
  • Prioritize savings: When you walk away from your divorce, there’s no doubt that you’re going to have fewer assets than when you were in your marriage. As a result, you might be hard up for cash if an emergency arises. That’s why it’s a good idea to focus on setting aside money to cover those expenses when they arise. Your budget can be helpful in figuring out how to do that.
  • Don’t forget about investments: Your divorce might cause a hit to your retirement savings. If that’s the case, then be sure your budget specifies how you’re going to save for your future. If you’ll be unable to or will be restricted in your ability to do so, then you can use that as a talking point during settlement negotiations.

Secure your financial future during your divorce

We know you have a lot to deal with during your divorce. But don’t let the stress of the process cause you to make costly mistakes that jeopardize your future. Instead, carefully think through the legal strategy you need to protect your future and secure the outcome you deserve.