A divorce is one of the most expensive and important decisions a person will ever make with financial ramifications that could affect your life for decades.
As soon as you realize divorce is inevitable, it’s time to start thinking about your financial future and working toward establishing a post-divorce budget.
Lisa C. Decker is a Certified Divorce Financial Analyst and author of the book “How to Divorce Your Spouse, Not Your Money.” Here are several tips from her on how guys can start to come up with a budget after divorce and begin to reclaim their financial future:
It’s sometimes overwhelming or intimidating to deal with the financial aspects of a divorce. It’s easy to just put it off until tomorrow, but then tomorrow turns into next week, which then turns into next month. Suddenly, years have passed and you still haven’t done any actual financial planning.
So the first step is to get started by coming up with financial goals. What are you trying to accomplish? What are your savings goals? What are you saving for?
What’s the fun of saving if you don’t have an idea of what you want to do with all that money? Do you want to pay off your mortgage? Maybe you’re saving for your child’s college education or for a vacation to Europe.
You need to determine what your goals are and create a budget with those goals in mind. That may take some outside help from someone like a financial advisor, or you may be able to find some help online, but having a budget is like having a roadmap you use to map the course of direction for your finances going forward.
Live within your means
We’ve all heard this saying, but it really is a struggle for a lot of folks.
Impulse buying has become a part of our culture, and it’s really important to manage those emotional purchasing decisions, especially after a divorce when you’re trying to regain your financial footing.
If you’re about to make a big purchase, stop and ask yourself if you can really afford it. Wait 24 or 48 hours to see if it still seems like a good idea to buy, and if so then make sure you know what your plan is to pay it off.
Also take time to research big purchasing decisions. Go online and make sure you’re getting the best deal possible.
Make savings automatic
It’s a good idea to make your savings automatic. Set up your account so that money is taken directly from your paycheck and sent to a savings account.
Essentially, you’re paying yourself in a way that avoids the temptation of using that income on something else. This is a lot easier than pulling the money from the bottom of the barrel and putting what’s left over into a savings account.
Plan for annual and unexpected expenses
Annual expenses like car and home-owner’s insurance tend to be easy to forget about and can significantly dent your budget.
Then there are the big-ticket expenses you don’t always expect but can’t avoid, like having to purchase a new car sooner than expected.
These types of expenses that we don’t see on a daily or monthly basis can be huge budget busters. Unfortunately, they’re also unavoidable, so you’ll want to give yourself a buffer when planning your budget so you’re not completely caught off-guard.
When it comes to managing your finances, you have to be a proactive partner rather than a passive participant.
You can’t just turn over your finances to someone else to handle for you. It’s incumbent on you to be involved with where your money is going. That means monitoring your spending and credit reports, understanding your investment strategies, and establishing long-term financial goals.
Lisa C. Decker is a Certified Divorce Financial Analyst and Real Estate Collaboration Specialist in Divorce. For more information on the services she offers, visit Divorce Money Matters.