Post-Divorce Life: Tips on living with less money

by | May 10, 2018 | Divorce

money, New York CDFA

If you’re currently working through a divorce and are worried about how to live within your means now that finances have been split, you’re not alone. ThePennyHoarder.com says, “The true cost of life after divorce includes everything from establishing separate residences and obtaining new insurance policies to getting back in the dating field.”

Finding ways to stretch the family dollar and live on less money is often the hardest part of life post-divorce. Here is a place to start:

Create a budget with the goal of achieving the following results.

Detail all income and expenses

  • Determine your net disposable income from employment, support and any other sources.
  • Get your checkbook register, checking account statement and credit card receipts.
  • Categorize your expenses into home, food, entertainment, etc. monthly.
  • Create a separate budget for child related expenses
  • Categorize your expenses between Fixed and Discretionary.
  • Determine your Total Spending.

Create guidelines for your spending in each category.

Remember these are just guidelines. If you treat them like rules you may not feel like you’re making a positive change.

Create a snapshot of your financial world.

  • Compare your Net Disposable Income to your Total Spending.
  • Once you have the first snapshot of your income and expenses you can begin planning to make changes.
  • Decide what constitutes a realistic budget.
  • Click here to compare your children’s budget to the National Averages.
  • Determine your debt to income ratio by determining what percentage of your monthly income goes to paying debts. If it exceeds 28%; consider trying to reduce your debt load.
  •  Discretionary expenses include entertainment and dining out and offer the best source of budget cuts.

Find where you can cut discretionary expenses.

Discretionary expenses include entertainment and dining out and offer the best source of budget cuts.

It will be helpful, even necessary for some, to work through this process with a Financial Planner. You are not alone in your dread for budgeting. Humans are built to think about surviving today at the expense of tomorrow.

 

This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.

 

 

Lou Falvo, Cross Roads Divorce Advisors

 

Lou Falvo is a Certified Divorce Financial Analyst® and CIMA® (Certified Investment Management Analyst) who assists clients by evaluating the tax and financial aspects of divorce. Lou is dedicated to reducing the burden of each client by thoroughly examining the financial elements of the client’s divorce, with a keen focus on what is in his or her best interests. Contact Lou to find out how he can assist you with your divorce proceedings at  lfalvo@crossroadsdivorce.com or (585) 542-2382.