Know Your Budget

One of the most important financial pieces of information you need to know while going through a divorce is, what does it cost to live every month? No matter what type of financial settlement you will be receiving, it is imperative that you know your monthly budget. What are the monthly expenses for the kids (if you have kids and/or they are of an age that you are still financially responsible) ? How much is your mortgage or rent? What are the various monthly utilities, phone bills, internet, streaming, etc.? You need to know if your income will cover your expenses post-divorce. When putting your budget together do not forget “self-care” items such as hair, nails, spa treatments, etc. You deserve to have your hair cut and/or colored and to take care of yourself. I often see women minimize this category or eliminate it all together. You want your pre divorce budget to realistically show what it costs you to live as you negotiate your settlement.

Remember your pre-divorce budget and post-divorce budget will look very different depending on the agreed upon financial settlement. While putting a budget together can seem difficult, it is a great exercise to go through and there are many tools out there to help you. Most online banking services have free budgeting tools as well as apps such as Nerd Wallet and Credit Karma. Once you have put together a budget, have a trusted friend look it over. As women we often minimize what we will need to live (especially the self-care) and tell ourselves, “I can make this budget work” or sometimes we have a category that may seem inflated such as groceries – are you shopping at an expensive grocery store? A trusted friend will be able to look at your budget objectively.

Finally, a budget is a guideline to help you manage your money and keep track of your cash flow. It shouldn’t be a financial handcuff where you can never stray beyond a spending limit for a category from time to time. It will also alter over time as your income and needs change. You may need to assess it closely at the beginning of your new post divorce life as you fall into a pattern of spending and then over time just check in occasionally to assess your financial well-being.