Navigating Your New Financial Independence
While the emotional impacts of a divorce are often discussed at length, there is significantly less conversation pertaining to how your finances are affected. Most people already know about the investment made when going through divorce proceedings, but what about when it’s finalized? Read on to learn more about how you can navigate your freshly single life and financial independence through creating a budget fit for your new circumstances.
What to Include in a Budget
When budgeting, it’s crucial to know exactly how much money you will be bringing in during the month - this is your final take-home pay, not your gross income. Knowing this is the first step to creating a sufficient budget for your family needs.
Major things that may need to be considered include:
- Custodial responsibilities (and are you receiving or paying child support?)
- Essential expenses (housing, food, utilities, etc.)
- Debt and credit cards
Once you have these three things in mind, it can become easier to decide how much should go where.
Create a Checklist
Depending on how often you get paid, you will want to create a checklist for the different categories of expenses: groceries, debt, rent or mortgage payments, utilities, grooming, healthcare bills, gas, and more all need to be laid out. Once you have these determined, think about whether each requires a monthly or weekly payment. For example, something like rent or mortgage may only need a payment at the beginning of the month, while you may require multiple trips to the grocery store. Also consider emergency expenses for worst case scenarios - creating a savings account may help with this.
Another thing that needs to be taken into account is if you are receiving child support. This will differ from your normal budget in that this needs to be used specifically in relation to the child. Items like educational and medical expenses, extracurricular activities, daycare, allowance if applicable, phone bills, etcetera, should have their own distinctions. You may find it more useful to create a separate budget for this entirely or make it a sole category.
Keep This in Mind
One of the most important things to remember is that budgeting is not one size fits all, and what works best for one person may be impossible for another. To find the best solution for you, consider working with a financial planner or advisor to get a sense of your situation.
If you’re still in the early stages of your divorce and are already stressing about what your finances may look like after the fact, your family law attorney can be a great resource and help you get a better understanding of how to move forward.
Need more assistance? Consider calling (626) 788-5225 to speak with one of the attorneys at Schweitzer Law Partners.