Divorce is a serious issue that unfortunately is a part of life. It can be hard on you, your spouse and the children, if you have any. It doesn’t have to be hard on your wallet if you take these steps to protect yourself from any further turmoil and disaster.
1. Do the math. When you get a chance to think through it, put down your expenses and income on paper. Remember to factor in the new expenses, legal fees, alimony, child support, stock dividends, asset splits and anything else that may occur. It’s good to have a number on paper so you know what you’re working with.
2. Take action now. There might be a need to get some additional income because of the figure you just calculated. Do this now. Drive for Uber, get a part-time job, a side business or anything else that earns you some extra dollars. This will help you from going too far into debt or financial ruin.
3. List down your monthly recurring expenses. Create a new budget designed to factor in your new life. What are your monthly expenses now that you have separated? Go over each detail from the rent/mortgage, utilities, food, gas and anything else that may have changed. Account for debt repayments if you have any as well.
4. Stay calm. As you create a new budget, you may be tempted to give in to despair and anxiety. Make some non-emotional decisions about what you can cut, where you can save or reduce. For example, do you really need that entertainment section in your budget now? Your life has more drama than you probably need, so why waste time watching other people’s dramas.
Remember, nothing has to be final. You can just temporarily cut back on some of the luxuries you may have, and pick them up again once you regain your footing.
5. Take an honest survey of your life. Don’t glamorize or defend or rationalize your decisions. Ask the tough questions about what you want vs. what you need. Do you need the Netflix account? Do you need the 2700 square foot house? Again, you might need to make cutback in some areas you wouldn’t want. Nothing has to be permanent, but a temporary cut back might give you a chance to get your finances back on track.
Divorce is just plain hard. No sugarcoating the reality of it. So when you look at your new financial situation, the best thing you can do is not to sugarcoat it, but tackle reality on reality’s terms. Honest assessments will help the turmoil and transitions divorce can have on a family. Just remember, other people have gone through before you, and they’ve survived past it. You can too with a little honesty and proactivity.