The standard of living tends to go down after a divorce, as the household income often gets cut in half, while the expenses double, leaving many individuals struggling to adjust to this new lifestyle. But even though managing your finances might seem challenging once you are the sole contributor, smart budgeting and advanced financial planning can make a great difference in your post-divorce finances. To that end, here are some important steps you should take in order to build and manage your budget more efficiently after the divorce:
Evaluate your income and expenses
While married, you have likely contributed financially to the household together with your partner, but now you will be the sole provider, meaning it’s best to reevaluate your monthly income, and see whether you earn enough to cover your current expenses. If you live in a country like the US, your tax returns from the past few years can be a great tool for evaluating your income sources.
After you’ve assessed your income, the next step would be to evaluate your regular expenses, from the monthly utility, bank, and insurance bills to the yearly taxes and expenses. This will help to give you a general idea of your monthly cost to live, but you should keep in mind that your previous expenses might be significantly higher now that you’re the sole provider.
Ensure a good post-divorce financial plan
Whether you are just about to begin the divorce proceedings or you’re currently in the middle of the process, a good settlement could make a significant difference in your post-divorce finances. For instance, child support can be of great help when it comes to providing for your kids, while a superannuation splitting order would lead to the best financial agreement possible.
For these reasons, many Australians, where divorce rates are currently on the rise, decide to hire a reliable and experienced Family Lawyer from Brisbane who works with them to deliver the best possible property settlement, financial agreement, and child support rate during the divorce proceedings. It might be a wise decision to hire the services of such a professional when it comes to your divorce agreements and settlements as well.
Revisit your ongoing accounts
Once you’ve acquired a great settlement deal, evaluated your income, and calculated your expenses, it might be best to revisit any ongoing accounts you might have. Chances are you are currently paying a higher amount for certain services that you might not necessarily need after a divorce, which will help to cut down on your monthly expenses.
For example, you might want to opt for a more affordable insurance plan, put a smaller amount towards retirement and emergency savings, or transfer your funds to a personal account that requires no fees, instead of a joint one, in an effort to easily save money now that there’s one less person in your household.
Consider giving up on some luxuries
As your financial responsibilities will be higher once you are the sole provider, consider making some changes to your lifestyle in an effort to lessen the financial burden. The home you shared with your former spouse is among the biggest expenses you might not be able to cover alone, which is why deciding to rent or sell it, and then split the earnings, might be a smart choice, depending on your settlement.
And if you are able to keep and maintain your home, keep in mind that giving up on even the smaller luxuries, from an expensive car to media subscriptions or salon appointments, can go a long way towards increasing your monthly budget after the divorce.
Although rebuilding your finances after a divorce might seem like a demanding task, it is achievable by following the incredible advice mentioned above.