At a certain point in divorce, most people realize that this process is going to force you to take a look at your spending. You can’t run from it. Even if you have a ‘do it yourself’ divorce, when you face living separately, you have to decide what you can afford. In other words, what will fit into your budget. This can be a very intimidating process, but it can also be the first step toward putting your income where you want to versus where you’ve always had to.
For some of us, these money issues may even be what led to divorce. Not having enough. Not agreeing on what is a priority. Spending too much of it or simply refusing to budget. These disagreements crop up in many ways. But now you get to make the final decision.
Time To Make A Plan
So now is your chance to plan – what do you have coming in? Note your net income or the amount of money you take home. Of course, there are things that we have coming directly out of our checks besides taxes, but you can look at those if needed after you put your new money plan in place. Right now, just note the amount that actually comes home. Now take note of your recurring bills. Things like the mortgage or rent, electricity and phone, etc. These should be bills that you know will hit every month and list them by date. Finally, list your incidentals like groceries, lunch and gas. Be sure to include your rare incidentals like an oil change or tags for the car.
Once you have this list, you’ve really outlined your budget. Break the total expenses out into a monthly amount and compare that to your income. Now you can identify if you actually have enough to pay your bills or if you need to reign in some of your spending. The beauty part is that now you know instead of having to guess. Now you can consciously see if you really have any extra money to spend on a new outfit or if you this purchase will force you to pay one of your bills late.
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Fine Tune Your New Budget
For bonus points and ease of execution on this new way of budgeting, take the next steps. Arrange the distribution of your funds around your actual paydays and due dates. Be sure to separate that money that you allocated for the rare oil change and hold on to it, so that it’s there when the time comes. Consider putting the debit and credit cards aside and using actual cash so you physically process that money has been spent. It will help dramatically with the tendency to overspend when using plastic.
Contact Us to Schedule a Complementary Strategy Session
One of the most important decisions that you can make to empower yourself financially, is to set your money plan. Learn how to spend less that you make. If you need help, consider hiring a budget coach. A coach will help you with accountability and guidance towards reaching your financial goals. Contact us at Smarter Divorce Solutions and we’ll help you get started with a money plan and the many other steps to take that will help you through your divorce transition.