How to Effectively Budget After You Get a Divorce

Divorce and separation can be a heartbreaking time, which, unfortunately, makes it easier to rack up debt. But, it’s important to not lose focus on your finances during this period. It can feel daunting to be suddenly left to look after your kids and pay for housing with just half (or less) of the income. However, instead of focusing on the negative aspects, create a budget and game plan to get yourself out of this tough situation.

Organize Your Finances and Create a Budget

With 1 in 5 U.S women fall into poverty after a divorce. It can be a real struggle to live on a much smaller wage, no matter your gender. But, it’s this gritty situation that will teach you a new way of life: frugality. The first thing to do is figure out your finances. Find out all of the debts you owe, and put them in a spreadsheet so you can see what the damage is.

To get some of the hard work done for you, download the Personal Capital app to track your income and outgoings. You can even use the app to see how quickly your debts are being paid off, and your retirement fund is growing.

Then, once you know your outgoings. Look at your income. Don’t forget about food stamps, child support, and any assistance you might be getting from your parents.

Make a Game Plan

Now that you know the difference between your debt and income, you can start an attack plan and budget. For some, the outgoings might be more than the income, and this is where the trouble begins. It might be wise to consider financial assistance as opposed to credit cards. The situation you are in is only temporary, and you’d just need the help until you got back on your feet.

To maintain the same lifestyle after divorce, you’ll need a 30% income increase, on average. It’s not easy to produce this money from thin air. Instead, here are some smart ways to cut back on your spending:

• Ditch Your Cable: This is a huge monthly cost that you should reduce. Especially, now that you can swap it for Netflix or Amazon Prime. Online streaming services come at just 10% the cost of the average cable bill in America.
• Change Your Cellphone Carrier: If you’re with AT&T, Verizon, Sprint, or T-Mobile you are probably paying far too much per month. Instead, you can switch to a smaller carrier that won’t break the bank. There are options to get a no-contract or SIM-only plan which come at a much cheaper rate, too. Some smaller carriers to check out are Google Project Fi and Republic Wireless.
• Reduce Your Grocery Bill: We all need to eat, but there are smart ways to shop at the grocery store. To cut down your grocery bill by $200, check out 18 Changes You Can Make to Save on Your Monthly Grocery Bill. You can also make use of cashback sites like the Ibotta app, Honey, and Ebates to get a percentage of your money back every time you shop.