One of the often overlooked considerations when it comes to separation is just how expensive it can be. For couples who are already stretching their financial limits, the costs associated with separation and divorce can be eye-opening. Some of these additional costs include moving costs, paying for a second residence and utilities, furnishing that place, postseparation support, child support, and legal fees. Therefore, when spouses separate, it is critical to develop a reasonable budget as a responsible step toward your brighter future.
- Gather all necessary documentation to determine your post-tax monthly income and your assets. This can include job related income, side income, and additional sources of income such as post-separation or child support. You need to know the starting point of your budget.
- Determine all of your “fixed” monthly expenses. This includes, but is not limited to, rent or a mortgage, homeowner’s insurance, property taxes, a car loan, child care or education expenses, student loans, child support obligations, spousal support obligations, and car insurance. Create a six-month average of your essential variable expenses, such as your utilities and groceries.
- If your essential monthly expenses seem high, then look at where you can reduce your monthly payments. This may include refinancing your mortgage or car loan at a lower interest rate, shopping for lower insurance policies, finding ways to reduce your utilities (like raising your thermostat or using less water), or becoming a bargain hunter for groceries.
- Subtract your essential fixed and variable monthly expenses from your income. The remaining amount is your disposable income.
- Look at your credit card and bank statements to determine how you are spending your money. This is where you are going to have to make some tough choices. You may be spending way too much at restaurants, on vacations, on sports tickets, or on shopping for things you never even use. Cut as much excess as you possibly can. When you accept that you are at a financial crossroads of your life, you can start a path of choosing function and necessity over comfort and habit.
Contact New Direction Family Law
When separating, planning for your financial future is an essential step toward your stability and happiness. If you want help with the legal aspect of a separation and divorce, contact New Direction Family Law. We have helped many clients successfully navigate the issues that arise when married couple separate, including property division, spousal support, child custody, and child support. We want to help you move forward. Our team proudly serves Wake, Johnston, Durham, and surrounding counties. Call (919) 719-3470 to schedule a consultation, or contact us online at our website.
Sarah J. Hink
New Direction Family Law