Even though your divorce marked the end of a big part of your life, it can also signify a new beginning. From this point forward, you are now solely responsible for all of your future financial decisions.
Easily one of life’s most stressful experiences, divorce can almost feel like a death. So, it’s important to remind yourself that even though everything in your life is ultimately going to change, you are going to survive this.
Like many soon-to-be single parents, the main thing I was worried about after the divorce was my daughter’s financial future. I just kept imagining us both living in a cheap motel for months, or even worse, inside my car. But instead of giving in to these fears, I decided to use them to help me create the best new life for us that I could.
The most reliable method I found to ensure that we weren’t living on the streets was to start looking at all of the finances. From separating our joint bank accounts to changing my financial plans, I found quite a few things that helped protect my future after going through a divorce.
Why Budgeting is So Important
Making the transition from living in a 2-income household to surviving on a single income can be a challenge for most of us, especially when there are children involved. Most relationships have one partner who manages all of the financial responsibilities, such as setting budgets, paying bills, and tax returns. If that wasn’t your area, managing your day-to-day financials may feel slightly outside your comfort zone.
The easiest and fastest way to find out exactly where you’re at financially is by creating a budget. It doesn’t matter if you’ve had any experience with budgets before or not, because you need to create one as soon as possible so you can start making plans for the future. There’s a new life waiting for you ahead, so you need to make sure your budget will cover all of your new goals and dreams.
Budgeting Before a Divorce
A divorce can become extremely expensive for some couples depending on the variance of everything from lawyer fees to child support. One of the smartest ways that you can be prepared for these costs is by identifying all of your financial resources and creating a new budget. Keep in mind that your budget will most likely need to be changed a few months later when the dust settles after the divorce.
I started by writing down the total amounts I earned at that time from all sources, as well as everything I needed to spend each day, and I also did one for each month. Simply by having access to detailed information of all my income and spending, I was able to find areas where I could cut back my spending and save a little money. Remember that if any of this starts to feel overwhelming at all, I highly recommend that you hire someone to provide you with professional financial support.
Budgeting After a Divorce
Expect constant stream changes throughout all aspects of your life after getting a divorce in Australia, including ones that will impact you financially. After all the paperwork has been signed and the proceedings have been finalised, you’ll need to create a new budget based on any revised amounts of income and expenditure. Instead of making the assumption that your expenses will be cut by half because of your newly reduced income, you should get accurate amounts for each different expense so that you can plan accordingly.
I suddenly found myself in control of my finances again for the first time in many years. If that ends up being you, you need to be aware of big-ticket items such as a rental bond, or insurances for your health, your car, or your home. Additionally, you need to look at the prices of everyday things that you may not have paid much attention to in the past, from beers after work with colleagues to your morning cup of coffee from the drive-thru. If you don’t take all of this into consideration, everything quickly adds up before ultimately causing a shortfall in cash.
Suddenly being single again after many years of marriage was also a massive shock for me, both emotionally and physically. But, rebuilding yourself financially after divorce with an updated budget or a financial plan can help you to feel much more in control and prepared for whatever life throws at you next. Simply by taking the necessary steps so that you can regain complete control of the essential aspects of your life, the transition to living alone will most likely be much easier.
Stay focused on the positives
Even though your divorce marked the end of a big part of your life, it can also signify a new beginning. From this point forward, you are now solely responsible for all of your future financial decisions. So, if you ever start to notice increased financial return from your own budgeting strategy or investments, you can look yourself in the mirror and be proud of your accomplishments.