Budgeting after divorce

1. You must remember, above all, that some belt-tightening will need to take place regardless of the circumstances. Getting married is voluntary and staying married is voluntary. Now is not the time to pout about how you didn’t want the divorce, or how the other spouse deserves what he or she has coming. You can’t support two households at the same level with the same income that you supported one. Cut your budgets to a level that meets both parents’ needs for at least the first two years post-divorce, and then incorporate that budget into your divorce agreement.

2. Make sure that you negotiate child support figures with your spouse rather than using the ones supplied by the online calculator for the state. Whether you are a cashier or an NBA star, the child support calculator rarely, if ever, supplies a lifestyle comparable to what a child is used to, at any income level. Use a needs-based approach, budgeting your actual expenses, and choose those as the binding numbers.

3. It’s usually better to pay off your debts with the equity in your home when you sell it after divorce. Do you really want to wonder whether your spouse paid off the debt that you both entered into that he or she agreed to pay when you divorced? When trust is in short supply, the best approach is to pay off all debts before the divorce if you could potentially be pursued later for the other spouse’s non-payment.

4. If you must cut anything superfluous from your budget, start with the things that have the least effect on the children. Guitar lessons may seem extravagant, but if you had no trouble affording them before, pledge in your divorce agreement to continue those kid activities, and detail who will pay what shares.
5. Don’t forget to include the employment bonus if either or both parents receive one. Even though one person’s name is on the bonus check, that belongs to both parents just as it would if it were income. Be sure it is factored in as income everywhere in your divorce agreement.