Creating a post-divorce budget can save you time, money, and stress in the future.

Divorce is exhausting, and by the time it’s all said and done you may find yourself feeling mental, physically, and financially drained. Yet, just when you feel like you deserve a break from the reality of it all, it’s time to start writing the next chapter—and suddenly, you are the main character and star of the show.

Start off on the right foot by getting control over your finances to lead a more peaceful and prosperous post-divorce life.

Making Cents

If you’re unaccustomed to budgeting, it can feel almost like a punishment. First of all, creating a plan for your finances can be anxiety-inducing if you’re already stressed about money and uncertain how you’re going to cover all of your costs. And budgeting and tracking expenses often feel like yet another tiring task when your plate is already full.

But consider the positives: budgeting and the habits it creates will save you future time, stress, and expenses. Don’t think of budgeting as a punitive measure; think of it as the foundation of financial freedom.

Essentials

The first step to creating a realistic budget is to get an honest understanding of how much your life costs. Make a list of every reoccurring expense or cost category that you can think of; look up prior debit or credit card statements to fact check your estimates. Next, reevaluate that list with a critical eye and identify any expenses that could be eliminated. The end result of this exercise should be a range of numbers—the bare minimum to get by versus the cost of being completely comfortable.

Add these forecasted expenses into a spreadsheet or budgeting app, and work towards allocating your money to each category without exceeding estimated amounts.

Income

Now that you know how much you’ll be spending each month, figure out how much income you receive from work after deductions like healthcare or retirement contributions, and add in any child support or alimony payments, and investment earnings.

Once you have a realistic estimate of how much cash you bring in each month, take a look at your expected expenses again. You may have to reduce costs or brainstorm additional sources of income if you’re unable to make ends meet. Can you pick up a part-time job or gig work? Make an emergency plan for additional income, even if you don’t need one yet.

Savings

Although it can feel impossible when you’re already strapped, savings are essential to the ongoing success of sticking to a budget. There are essentially three categories you should focus on initially:

  • Short-term savings: Create a cushion in your budget to absorb the expected but unaccounted for expenses that arise along the way—holiday gifts, new car tires, or a fund to replace your dryer when it dies. You can’t specifically predict all future expenses, but you can assume they’ll exist.
  • Long-term planning: Don’t neglect retirement accounts. If you make contributions an ingrained habit early into the budgeting process, they will be easier to maintain. Take advantage of any employer-offered opportunities, particularly plans that will deduct the money from your paycheck before you ever even see it, as well as any company match to your contributions.
  • Emergency funds: Once you finally have your head above water, celebrate by establishing an emergency fund. Start with a reasonable goal, like $1000 in savings, and work toward a three to six-month safety cushion of living expenses. It may not be easy, but the relief you’ll feel over having those savings on hand will far outweigh the temporary pain of making the necessary sacrifices.

Budgeting is all about creating a roadmap for your money and avoiding detours at all costs. Explore different budgeting systems and apps to discover what record-keeping method works best for you. And establish a sense of accountability around your spending and saving habits.

Awareness and focus on your financial efforts will help you create an empowered and independent life that eases stress and affords new opportunities. Family Plan is committed to empowering parents after divorce or separation and creating harmony by improving collaboration, helping with organization, and simplifying payment obligations to reduce stress and eliminate potential conflict. Download our app to get started.