How a Divorce Can Affect Your Personal Financial Management

Personal Financial Management - Divorce Finance

Divorce can completely tear apart your world. It can leave you heart-broken and lonely and can wreak havoc on your lifestyle, your friendships, and even your budget. The last upheaval can be extremely devastating, as half of the normal monthly income you are used to is gone, leaving you to face a mountain of debt and the potential destruction of your credit.

It doesn't have to be this way though. While much of your life may seem out of your control when you are facing a divorce, your finances don't have to be. You can re-evaluate your personal financial management now, with the help of a few tips and the right software, so you can maintain financial stability.

How Divorce Affects Your Finances- And How to Deal With it

Married life generally means two incomes. And if one spouse is in charge of staying home and caring for the house, the other spouse's income is generally large enough to compensate for the split in responsibilities. When you get divorced however, everything changes. You are left with one income and all of the responsibilities in the household. This means if you were previously responsible for taking care of the house and the children, you now need to find a job. And if you were previously responsible for paying all the bills, you may now need to cut back on your work hours in order to care for the house and children.
It can be difficult to adjust to this situation, but with the following tips, you can easily create a budget you can stick to.

List your income, including any child support or alimony you receive.

Create a list of expenses, including alimony and child support if you are ordered to pay it each month. You should include mortgage payments, insurance, medical expenses, credit card payments, utilities, car loans, and any other monthly bill you typically have to pay.

Compare your income and expenses. If your expenses add up to more than your monthly income, see what items you can eliminate. For instance, you might be able to sell your car for one that has a smaller payment you can pay off more quickly. You might need to move to a smaller home or rent instead of owning. You may need to decide whether you can do without cable, internet, and that weekly subscription to your favourite magazine.

Consider your wants and your needs. These are two different things. Your needs include shelter, food, medical care, and child care. You can't live without these things. Be ready to cut out any expenses that are not absolutely necessary so you can afford those needs.

Avoid racking up new debt right away. Right now you are struggling with your personal financial management, and adding a new credit card payment or car loan can send your budget over the edge. It paints a very gloomy picture of your financial future and should be avoided at all cost until you are back on your feet after the divorce.

Remember, these changes don't have to be permanent. As you settle into your new life after the divorce, you may be able to find a better job, stretch your budget a little more, and learn what expenses you really need and which ones you don't. Keep track of them with your personal financial management budget online so you can avoid the devastating financial effects divorce can cause.

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