Budgeting After Divorce: How to Get Your Finances Back on Track Once the Dust Settles
Budgeting after divorce is crucial if you are looking to get your finances back on track. Divorce is expensive and your new situation might mean that money is tighter than usual. Therefore, you’ll need to figure out how to create a realistic budget, set financial goals, and practice healthy spending habits. Figure out what your monthly income and debts are now that the divorce is final. From there, you can create a realistic budget to follow. Try to make both short-term and long-term saving goals. Check your credit score and try to boost your number if it’s low. Finally, if possible, speaking to a financial advisor can be very helpful. They can assist you with figuring out a healthy budget, creating goals, and preparing for retirement. Hopefully, you will be able to start building up your savings to give you and your children financial security.
Going Back to Basics
The first step towards budgeting after divorce is to figure out exactly where your finances are now that the divorce is final. Divorce can change your finances drastically. For example, you might have changed your living situation, job, and childcare. You might also be needing to make payments for financial support for your ex-spouse or children. Sit down and create a list of how much money is coming in each month. Then, make a list of all of your monthly payments and debts. Check your savings accounts, retirement accounts, stocks and any other savings you might have to get a general picture of your finances.
Create a Budget and Stick to It
Once you know how much money is going in and coming out each month, you can begin budgeting after divorce. Try to make a plan to build up your savings so that you are prepared for an emergency. A good goal is to have enough in savings to cover a job loss for at least six months to a year. Don’t forget to include all of your monthly subscriptions, as they can add up quickly. Make short term goals to create an emergency fund and pay off debts. Then, you can focus on long-term goals like investing, paying for your children’s education, and retirement.
Build Up Credit
When budgeting after divorce, it’s helpful to find out your credit score. This will impact you if you are looking to rent an apartment or buy a car, among other things. You can check your credit score online and begin to make a plan if your credit needs to be higher. Pay your bills on time every month. In addition, keep your balance on credit cards well below the credit limit, and ask to raise your limits if possible. Just don’t use that as an excuse to spend more!
Speak to a Financial Advisor
Finally, it’s a great idea to speak to a financial advisor when budgeting after divorce. They can help you figure out a healthy budget for each month and give you tips for sticking to it. They can also help you figure out the best ways to plan for your retirement and large expenses like weddings or college. Once you begin saving, they can help you navigate investments and find ways to make your money stretch even further.
Budgeting after divorce is important because it’s very likely that your financial situation has changed. Once the divorce is final, it’s a great idea to take a glance at your overall financial health. Look at your monthly ins and outs to help you figure out a realistic budget. Then, practice healthy spending habits so that you can stick to that budget. Create short-term goals for building up your savings and paying off debt. From there, you can create more long-term goals for fun things like vacations, as well as retirement. Check your credit score, and work to improve it if you need to by paying bills on time each month. Finally, sit down with a financial advisor to help you figure out the best places to invest your hard-earned savings. Hopefully, you can set yourself and your family up for financial success by creating a healthy budget and focusing on savings.