7 Steps on Budgeting After a Divorce

Perhaps not surprisingly, divorce is considered the second most stressful life event after the death of a spouse. Financial disruptions can add to the stress. Read on to learn how you can create a post-divorce budget that can help you take control and pursue your goals.(1)

Step 1:  Money Date

Your first step is to open your calendar and book a two-hour “Money Date”, an appointment with yourself when you’ll take a detailed look at your finances. Set up at a cozy cafe, or wherever you are comfortable and focused. Bring a laptop, notebook, pen, calculator, calendar, and passwords for your online accounts.

Step 2: Get Clear About Your Goals

• Short Term
  Looking at the next 12 months, ask yourself, “What are my short-term financial goals this year?” Perhaps you need new furniture, or a vacation, or you’re going back to school. Write down all the things you’d like to accomplish in the next year, and estimate what they’ll cost.  

• Long Term
  Now, looking at the bigger picture of your life, ask, “What are my long-term goals and dreams?” Perhaps they’re related to retirement, sending a child to college, or making a long-distance move. As you list these goals, jot down any questions you have. We can help you evaluate costs.

Step 3:  Add Up Your Income

List every source of money that you regularly receive. If you work, include your total monthly paycheck after taxes. Include alimony, child support, and any other sources of income. Tally up your monthly income, and write that amount here.(2)

Paycheck + Alimony + Child Support = YOUR INCOME

Step 4:  Write Down your Expenses

• Start with your Fixed Expenses
  These are non-negotiables; things like rent or mortgage payments, utilities, transportation, credit payments and groceries. 

• Then, list your Variable Expenses
  These are the discretionary flexible categories like clothes, entertainment, dining out, and savings. If you can, include a “fun money”  category for treats. 

Step 5:  Prioritize and Adjust as Needed

With your income and expenses in hand, you can fine-tune your budget, adjusting it to fit your lifestyle and goals. Ideally, your monthly income covers both your fixed and variable expenses, with room to spare.  If not, you might have some decisions to make.  Start by reviewing your variable expenses. Then consider ways to add income. Revisit your budget often and adjust according to your priorities.

Step 6:  Assemble Your Dream Team

Now is the time to assemble the superhero team to support you in pursuing your goals.  Include your financial professional, divorce lawyer and accountant.  You may also want to inlude your close friends, your therapist, and even your personal trainer or nutritionist.  Their support can help you stick to your budget. 

Step 7:  Make it Practical

To stay on track, create a practical approach to follow regularly.  Consider using a simple budgeting software, such as Mint or YNAB.  Reach out to your support team regularly, and be sure to reach out to a financial coach if you are in debt. We like Chance Jackson - shoot him an email at chance@astrolabe.financial or reach out to a Financial Advisor at Elevation Wealth. We want to walk alongside you on this journey, and offer personalized advice and resources for each step.(3)

Remember 
Change might be tough, but so are you. 
By keeping to a budget and staying focused on your goals, you can run the divorce marathon and cross the finished line stronger, wiser, and more financially prepared for what’s ahead 

Resources
(1). Stress.org, 2024
(2). The information in this material is not intended as tax or legal advice.  Please consult a tax or legal or tax professionals for specific information regarding your individual situation.  
(3).This is a hypothetical example used for illustrative purposes only. It is not representative of any specific investment or combination of investments.  

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.