After the Divorce
The day has come. You divorce is final! All the days, weeks and maybe even months of struggling through the legal process, the negotiations with your ex are finally behind you. It’s not the end of the feelings, but it is the first real true closure point that you can point to and say My marriage is totally and completely over now. It’s time for a deep breath, or perhaps even a huge sigh of relief. Perhaps you’ll find yourself crying at this point, or perhaps you’ll want to throw a party. You may even find yourself wanting to do both. But once the dust settles, you’ll at some point find yourself getting ready to move on with this new phase of your life.
You’ll probably find that beyond the emotional aspects of getting back on track, there are also some major parts of your life that need some attention now, one in particular that we’re going to cover here is the financial aspects of getting your single life on track. Divorce can be devastating financially There may be legal fees that piled up during the process, you may now find yourself in a situation where you are obligated to pay child support and/or alimony. You may find yourself assuming the responsibility for a mortgage, with or without some assistance from your ex. You may find yourself suddenly taking over the family finances when you never really got all that involved in them before the divorce. Whatever the case may be, it’s time to sit down and take a hard look at the finances, organize yourself and your affairs, perhaps begin to live on a tighter budget than your are used to, and hopefully still be able to enjoy life a little. I’m going to help you get started in the right direction here in this next section.
Step 1. Get Organized
Let’s face it, you must get your entire financial situation organized before you can get your plan in place. Don’t be too hard on yourself as you start this process, accept the fact that you’ve been pre-occupied lately with the process of the divorce and that it’s perfectly normal to let things get a little out of control while your energy was focused in another direction. But now it’s time to get this aspect of your life back under control, so clear off the kitchen table, grab all the bills and the bank statements, a calculator and a notepad and pencil and lets get busy. One note here, you may already use some software like Quicken to keep track of your finances, and if that’s the case and it’s current, great! But if it’s not, I still recommend you spend a little time with just a pencil and paper first, working out the rough summary of where you’re at before you begin to work on getting the computer current.
Once you have this mountain of paper before you on the table, run through it and get it divided into smaller, more manageable piles. Start with the basics, bank statements in one pile, credit card bills in another, utilities in a third, etc. Now, depending on how involved you’ve been in the management of the family finances while you were married, this task may simply be a quick organization of the stuff you already know about, or it may be your first foray into an area you’re not all the comfortable with. Either way, breaking the mountain down into manageable mole hills is the first step in taking control.
Step 2. Get the Big Picture
The next thing we’re to do is create a sort of overview picture of where you are now. Create two main columns on one page, one is going to be the income column, the other will the expenses column. Start the income column by listing all the money that will be coming into the house in a typical month. This
should include any wages you make (I’d just drop the net amount in for now, worry about taxes and such a little later) any alimony or child support you will now be getting, along with any other money that comes in from whatever other sources there may be. When you’re pretty sure you’ve got everything listed, go ahead and total up this column. Now do the same thing with the bills, putting them into the expenses column. For now, just list the monthly amount of the bills, again we’ll worry about the total balances later on. List all the monthly bills, the credit cards, the utilities, the piano lessons and so on. Once all the bills are listed, then do your best to plug some numbers in on those things that are more variable. Try to estimate what you realistically spend each month on groceries, gas, movies, pizza, etc. All these numbers make up your basic monthly expenses. Again, when you’re pretty confident that this list is complete, total it up. With any luck, your total income number will be larger than your total expenses number. If it
is, subtract the expenses from the income and that’s what I like to refer as the slush money you should have each month. Do NOT go spend that money!
If you find yourself in a situation where the expenses are larger than the income, you are in a little tougher position. You’re going to have to take some action right away to begin to fix this situation. I do want to offer some advice here though, if you do find yourself in this position where the expenses add up to more than the income. Please, PLEASE do not take this situation and add it to the emotional pain you’re
already feeling as a result of the failure of the marriage. Being in a bad financial situation does NOT mean you are a bad person! It just means you’re in a bad financial situation. This is a problem that can be worked through, please treat it as that and not as if it were the end of the world.
Guess what. You’ve just built the basics of your new monthly budget. There in those two simple columns are the building blocks of your budget, the start of the financial plan you’ll be living with as things move forward. If you’ve never used a budget before, this will be a new experience for you, if you’ve always run off a budget, then this is just the framework of what it will look like now. Ok, now let’s continue on with this process as we move on to.