FINANCIAL Planning for Divorce
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Divorce Resource Center
Financial Planning for Divorce
Plan Ahead for Your Financial Wellbeing
Divorce impacts a person’s financial life in many ways. People often worry about how they will budget their finances to pay for a lawyer, pay bills while the case is going on, and how they will meet their needs after the divorce is final. These are all valid concerns, and they must be viewed and evaluated realistically.
During a marriage, people learn what income they can count on. They know what their financial obligations look like, and they know how to pinch pennies to make sure their income covers all of their necessary bills. During a divorce, however, even if incomes stay the same, people’s financial obligations change dramatically.
Do you need help planning for life after divorce? Reach out to our team of divorce attorneys in Denver, CO today for a free, no-obligation consultation.
How a Divorce or Separation Can Affect Your Finances
After separating, a couple may live in different homes. This means that there are now two utility bills, two rents, two water bills, and more. When two people separate, they have the same amount of money coming in as they did when they only had one household. Now that money must be used to support two households.
The reality is, there will likely be less expendable income in your life while you are going through divorce. This is true for two-income and one-income households. We get accustomed to being able to pay our bills and we know how much money will be left over when all is said and done. But now, the necessities have doubled.
Considering Divorce? Always Plan Ahead.
It is important to plan ahead to lessen the financial burden of separating households. First, understand how much money you have coming in each month. If you don’t have the money, you can’t spend it. Next, think about where you plan to live. Maybe you will stay in the marital home and the other person will leave. Maybe you’ll be the one to leave, in which case, where will you go and how much will it cost?
It will be easier to determine what your bills look like if you are staying in the residence to which you are accustomed. If you are leaving, you will need to research how much rents are, what utilities cost in that location, what kind of amenities budget do you need, and more. Once you get a handle on your anticipated income and expenditures, look at your soon-to-be ex’s income and expenditures.
Now you are ready to make a plan.
Don’t Wait to Start Planning for Life After Divorce
It’s important to be realistic. If you are a one-income household or your income is substantially higher than your spouse’s income, you may be required to help the other person meet their financial obligations even if you no longer live with them. If you are a two-income household and you and your spouse make similar incomes, you may be required to support all of your financial needs on your own.
Again, you will continue to have bills and living expenses, but you will now need to meet all your needs on half the income. In order to make things work, you may need to cut back on eating out or hold off on buying that new big screen TV. If expenses exceed your income, do you have access to savings, friends / family who are willing to help, or the ability to withdraw some funds from a retirement account?
Understand the numbers you are working with and make a plan for how to make these numbers work for you. If you are concerned about your spouse trying to take advantage of you financially, be sure to contact our firm and know your rights.
Our Denver divorce attorneys at Modern Family Law are ready to help. Call us at (303) 394-3030 to begin.