Unfortunately, divorce is incredibly common in the United States, with between 40 and 50% of marriages ending in separation. Even the smoothest and most easy-going of divorces can be a threat to your personal finances. You’re going from a double-income household to a single-income income household in a short period of time. If you’re not prepared, you could jeopardize your savings and even your retirement funds.
So how can you keep your finances secure when you’re going through such a big transition? Consider the following tips to keep your finances safe and sound during your divorce process and after everything’s been finalized.
Create a post-divorce budget
Before your divorce has been finalized and you begin living separately from your partner, it’s a good idea to create a budget so you know what your monthly expenses will look like. Living on your own costs a lot more than living together and you’ll need to know what you can afford on your income.
First, figure out your immediate needs such as a new place to live, new health insurance, a new vehicle, groceries, and gas. Once you have your immediate needs figured out, you can work on saving for bigger items like retirement. Don’t worry about saving for these bigger items until three to six months after your divorce so you have time to settle on your new budget.
Don’t forget to include your kids in your budget
If you have kids when you’re going through your divorce, it’s important that you’re budgeting for them, too. Even if you’re not the custodial parent, the non-custodial parent will have 88 days on average with their kids during the year.
Consider what you usually spend on your kids. They’ll need clothes, school supplies, food, money for after-school sports and activities, and more. You’ll be splitting these costs with your ex, but it’s still important to budget properly to keep yourself from falling behind on other payments.
Manage costs during the divorce process
It’s not fun, but it’s a good idea to plan for the divorce process like it’s a major life event. While you and your soon-to-be-ex are still together, put aside money to use for the divorce itself. Look at the invoices for financial planners and divorce attorneys so you know how much you’re paying. Not having to consider selling any of your gold or silver jewelry will be a plus, too.
It’s also a good idea to familiarize yourself with the divorce laws in your state. This will give you a better understanding of the timeline for the divorce process so you won’t be surprised if things are slower or faster than you anticipated.
It can be challenging to live on a single income for the first time in a while after your divorce. But by following the tips above and doing what you can to save money, you can successfully manage single-income living after your divorce.