Number 3 in the “Truths About Divorce” Series…
Monetary stress often leads to marital issues which can end in divorce. Ironically, divorce exacerbates financial issues, so we need to consider how to handle our new fiscal realities. As I began to plan for life as a single parent, I realized my mental calculations for the cost of two separate homes were off –by a lot. I thought, “We spend X on our mortgage, divide by two and voila- housing cost!” Wrong. Though we split the furniture and household items, we each needed more to fully equip our respective residences. Ditto electricity, heating, internet, cable and other utilities. Food, cleaning products and other day to day expenses? Double them.
If it costs more to be divorced, what can you do to prepare?
1.Realistically assess your current family budget
- What are you really spending? Unless you handle the money in your relationship, you probably don’t know.
- Review and Cut the fat –extra cable channels, eating out and frivolous shopping add up
- Uncover Debt – credit card balances, unpaid taxes, business losses and other debt factors into your overall financial picture. Make sure you know what is owed as a couple.
2.Itemize children’s expenses
- If you’re re-entering the workforce, add childcare expenses
- Decide if private school will be covered
- What is the real cost of extra-curricular activities? Calculate uniforms, shoes, fees and travel
- Does your child have special needs? Consider medical/therapeutic expenses, ongoing childcare or respite costs
- Clothing and other essentials Kids like having certain items in each home, so be ready to have a few extra sneakers, PJs and other essentials at both Mom’s and Dad’s.
3.Prepare a budget for your new, individual life
- Cut the fat-again- you have your own little expenses that can probably go, at least temporarily.
- Re-entering the workforce- If you are going back to work, plan on bringing lunch when you can. Those $20 salads add over $100 to your weekly budget. Beware the “buy a new wardrobe for work” syndrome. Work attire is generally less dressy now and you probably have enough to get started.
- Plan for emergencies. Cars break down; people get sick. Have a little stash ready.
- Shoot for a 2-3 months’ worth of key expenses saved in case support isn’t paid promptly or you lose your job. It may take time to build this up, but it’s worth the effort and sacrifice to have piece of mind during a cash flow problem.
- Get the kids what they absolutely need but not everything they want
- Have an honest conversation about finances and the new realities of what they can and cannot have.
- Where age-appropriate, encourage your children to work. Earning their own money is a powerful lesson and it looks great on college applications!
- Avoid the temptation to reproduce your old life.
The last point was the hardest for me to avoid. So desperate was I to help the kids transition into this new, more difficult life, I rented the largest house I could afford, kept my housekeeper (who doubled as a babysitter) and continued to provide many of the “goodies” my kids came to expect. I did this by swiftly spending my half of the proceeds from selling our home. I was barely earning any income at the time and collecting neither alimony nor child support. My largess lasted about 18 months. I descended into credit card debt and ultimately had to drastically reduce our lifestyle. While it’s heartbreaking to say no to your children when they want things, it’s far more important to be able to provide the things they actually need.
“Remember when we could buy whatever we wanted at the mall?” My daughter once asked wistfully. Yes, I do. It pains me still sometimes. But 10 years later, we are living well enough to enjoy ourselves while appreciating everything we have earned through hard work and creative financing.