If you are thinking about getting a divorce then now is the time to start making a budget for you and your family. This will help you get through the process without having to deal with the added financial pressure.
One of the biggest mistakes people make when they get divorced is not getting ready financially for the process itself. Divorce costs money. There are legal fees which can be simply low-cost divorce agreements or huge amounts if a battle ensues. There are also costs that most people do not think about.
An average divorce takes three years from the time of separation to settlement. In this time, we often see couples who may have been financially okay become financially disadvantaged. The bills begin to mount and oftentimes there’s no planning about how to handle the expenses during the separation.
When you separate, there are still financial obligations you may need to deal with such as mortgages, household bills, car repayments, insurance, credit debts, payday loans, and children costs. Then there are new costs that need to be covered such as two lawyers, legal costs, an accountant, mediators, and other support professionals. There is also the cost of setting up a second residence for the person leaving the family home.
Some people choose to live in the same home until the actual divorce settlement goes through. Even this arrangement will cost you. As you start dividing expenses, there will still be all the legal costs to consider and then the added costs of two separate people living under a single roof. Even though you may feel like you are being ruled by your emotions. Stop and consider how you may be hurting yourself and your children if you do not look after your finances.
The first thing to do after you have decided to separate is to get all your documentation. With this, you will be able to get an overview of your weekly, monthly, and yearly costs. Add to this your estimated costs of a second home, two lots of legal costs, and any extras you can think of.
The next thing to do is sit down with your spouse and discuss how much money you are both willing to spend on the divorce and how long you think the process is going to take. Most people do not have more than a couple of month’s expenses put aside. Maybe you will need to take a loan to pay for the added expenses of divorce. Banks can be quite accommodating and may let you forgo mortgage payments while the divorce is going on. However, they will want their payments eventually and it will come out of the sale of your home before you see any money.
Sorting your finances at the time of separating can make the divorce process easier for both of you. This way from the beginning, you are both taking responsibility for the divorce and separation instead of stumbling from one bill to the next.
You can jointly decide how much you are willing to spend which will give you a clear idea of how long you can afford to keep things going. By deciding on your finances before you separate, you will effectively already be working together to settle your divorce.
Nicola Baume is a divorce planner and coach helping people get through marriage breakdown so they can move on into their happily ever after with confidence. You can read more about Nicola’s work at http://www.baumeandco.com.au or visit her blog http://www.simpledivorceadvice.com
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