If you are like most people in New York, you don’t have a budget. Maybe this has worked well for you if adequate money comes in at a good pace and you have minimal expenses. However, this is rarely the case, and most households pay their bills and let the future take care of itself. Unfortunately, raising a family without a budget often ends badly when emergencies or other expenses take you by surprise. Planning ahead is always the best way to prevent such financial disasters.
As important as a budget is for married couples, if you are approaching divorce, that budget may be your lifeline. The first step to creating a budget is understanding how much money comes in and how much goes out. This includes both your income and expenses and those of your spouse, as well as your total household expenses. What you may soon realize is that, without each other’s help, you may both be facing years of financial hardship after the divorce.
Working for the common good
Financial advisors say that a post-divorce budget is crucial to financial success. Your budget should be as forward-thinking as possible, and ideally, you and your soon-to-be ex-spouse will help each other through this planning process.
One of the most difficult parts of post-divorce life is affording separate residences. It may be that, after an equitable division of assets, the spouse that is moving out of your home will not be able to afford a new place to live. Some ways in which you and your spouse may be able to support one another in this area include:
- Buying out one spouse’s share of the house’s equity
- Agreeing to a smaller portion of the savings
- Sharing the family home until your spouse can afford to move out
Of course, if you and your spouse have children, you will have years of co-parenting ahead, and much of that will include money. If you can budget together for those expenses, you may find there are fewer disputes as the years pass. Private school educations, college, summer camps and other activities, for example, are not always part of child support rulings, so you and your spouse would be wise to discuss those matters and prioritize them in your budget.
If you and your soon-to-be ex can find the strength to work through these financial issues outside the courtroom, you are likely to emerge from the divorce with dignity and peace of mind. Avoiding the contention and divisive nature of litigation can go a long way in establishing a positive relationship for the future. This will serve you well, especially in matters of co-parenting.