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5 Post-Divorce Budget Tips

We’ve previously published a number of pieces to help you financially prepare for and navigate through your divorce (e.g., Three Critical Financial Steps in Getting You Through Divorce and our free eBook, “Seven Things to Do Before You Divorce”). As you prepare to move beyond divorce, you may be wondering how you’ll ever make ends meet as you transition from a double income to single income household.

TruNorth Divorce has put together a quick list of five post-divorce budget to-do’s for the newly separated—from big ticket items to the smaller often overlooked expenses.

Be realistic about your reduced household income 

With divorce comes the separation of a household and division of assets. The move to a single income household can completely alter your financial outlook—for better or worse. The first step to determining your post-divorce budget is to total up your adjusted monthly expenses and compare this against your new gross monthly income. 

Unless you were the sole income earner, your household income has been reduced. Ideally, your monthly expenses—rent or mortgage payments, utilities, internet and phone services, food, gas, etc.—shouldn’t exceed one third of your total monthly income. Your post-divorce budget could end up leaving you with a surplus, allowing you to splurge by increasing your slush fund. More likely though, you may find yourself having to reduce spending on nonessentials to stay in the black. 

Consider often overlooked increases in household spending

Spouses share cell phone plans, insurance plans, streaming subscriptions, and more. Combining lines for a family plan discount offered by a cell phone provider and bundling auto insurance policies for a better overall rate are just two examples of how couples save money through shared policies and plans.

For some, part of cutting ties with their former partner involves doing away with anything shared. Anything to avoid that awkward text exchange months down the road asking if the Netflix password was changed. Do yourself a solid and be sure to factor these small increases into your monthly budget. It might not seem like much, but the little things can add up quickly. It’s important to get an accurate picture of your spending to establish a proper budget.

Look for viable healthcare coverage

Many married couples share healthcare plans and often choose the better employer plan for optimum coverage and price. If you and your ex shared a health insurance plan, it’s possible that you may see an increase in health insurance coverage costs into your post-divorce budget.

Depending on the specifics of your situation, healthcare could end up being a one of your more costly post-divorce expenses. If you were covered by a spouse’s employer you will need to seek affordable coverage outside of an employer provided plan. Explore the options available in your area, including state and federal healthcare programs that may offer discounts or subsidies.

Pickup contract work to earn additional income

If your post-divorce budget is tight, you may consider picking up some extra cash through “gig work” and independent contracts to supplement your income. Food delivery, rideshare services, and more rely on independent contractors and offer schedule flexibility.

Use your skillset to your advantage—i.e., if you have a strong writing background, consider ghostwriting for a blogsite or tutoring. Craigslist advertises gig jobs in a standalone section and freelance job postings are commonly shared through social media job posting groups. Landing a good side hustle is a quick way to thicken your income stream.

Stick to your post-divorce budget

The first rule of budgeting is stick to your budget. For many of us, that’s easier said than done. Tracking your spending month-to-month can help provide a more accurate picture of where your money is going. Little changes like making your own coffee at home can go a long way to 

Breaking down your spending habits can help you make smart decisions about how to reallocate spending and maximize savings. For example: if you find that your food budget is consistently blown because you’re ordering takeout more than twice a week, you can consciously choose to put a cap on that spending. To monitor how well you’re doing, use an expense tracker app like Mint by Intuit.

Divorce doesn’t have to mean living in squalor. It may require some adjustments to make ends meet and build a solid financial future though. Proper budgeting can set you up for post-divorce financial success. 
For more articles on all things divorce-related, explore our blogsite.