Finding ways to stretch the family dollar and live on less money is often the hardest part of life post divorce. Here is a place to start:
Create a budget with the goal of achieving the following results.
1. Detail all income and expenses
- Determine your net disposable income from employment, support and any other sources.
- Get your checkbook register, checking account statement and credit card receipts.
- Categorize your expenses into home, food, entertainment, etc. on a monthly basis.
- Create a separate budget for child related expenses
- Categorize your expenses between Fixed and Discretionary.
- Determine your Total Spending.
2. Create guidelines for your spending in each category.
Remember these are just guidelines. If you treat them like rules you may not feel like you’re making a positive change.
3. Create a snapshot of your financial world.
- Compare your Net Disposable Income to your Total Spending.
- Once you have the first snapshot of your income and expenses you can begin planning to make changes.
- Decide what constitutes a realistic budget.
- Click here to compare your children’s budget to the National Averages.
- Determine your debt to income ratio by determining what percentage of your monthly income goes to paying debts. If it exceeds 28%; consider trying to reduce your debt load.
- Discretionary expenses include entertainment and dining out and offer the best source of budget cuts.
4. Find where you can cut discretionary expenses.
Discretionary expenses include entertainment and dining out and offer the best source of budget cuts.
It will be helpful, even necessary for some, to work through this process with a Financial Planner. You are not alone in your dread for budgeting. Humans are built to think about surviving today at the expense of tomorrow.
Wellspring Divorce Advisors helps individuals and couples address the financial aspects of divorce in a civilized, equitable, and efficient manner by providing expert divorce financial planning and advice.
Contact us to find out how we can help you through this process.