3 tips for Building a Budget now you are Divorced, Author Clarissa Rayward
This is where that pesky word ‘Budget’ starts to come in!
Divorce means change, check out the advice on NAB’s Life Moment hub and how to manage your finances properly during the process. Initially it might seem like your life is in chaos, particularly if the end of your marriage was not your choice. And the best way to manage chaos is to start to organise it.
When it comes to you finances, a budget is a great place to start so here are 3 tips that can help when it comes to building your budget during divorce:
1. Why a Budget?
Ok, so this might seem a little obvious to some of you but if you are anything like me, the very word ‘budget’ probably has you ducking for cover! The word ‘budget’ sits in the same box as the word ‘diet’ for me- both are things I should do a little more often than I do!
When it comes to budgets they can be a lot like those fad cleansing juice diets where we convince ourselves we can cull all those expenses and save for a rainy day and of course two weeks later we realise that was never really going to work out at all!
But when it comes to your divorce I am going to encourage you to throw those ‘fad budgets’ out the window and get to building a real-life budget just for you- one that gives you the information you need help you make some really important decisions for you and your family now and into the future.
2. Build YOUR Budget!
Now I have convinced you to give it a go, it is time to work out how to begin! This is where I say build a budget in a way that works for you. If you are someone who lives and breathes for excel spreadsheets or clever online apps then get to the laptop and start building out your equations! But if you are a little like me and would prefer a good old pen and paper then just start there.
With a quick Google search you will also find a lot of great online tools for building budgets that will be a great prompt as you work your way through (have a look at this simple one from NAB here) or you can download my basic budget tool here too.
If you and your former partner are already living apart then chances are you have already started to separate your finances. If you are still living together then at some point that will probably change and so you might want to build a budget that takes into account the costs of moving or alternate accommodation in the future. The Life Moments hub comes in handy with a lot of tips on establishing your financial independence when your separation or divorce happens.
The beauty of budgets is that once you begin, you can create as many different scenarios as you might need and when it comes to negotiating the division of your assets and income with your former partner over the coming weeks, a few different scenarios will come in handy!
3. Your pen is at the ready but where do you begin?
Ok so you have your spreadsheet set up or your notepad ready to go and I hear you ask “where do I begin?” The strength of your budget sits in the data! (I sound like my Accountant now!) The point is, if you just run along and guess, there is a good chance your budget won’t really reflect your actual position right now and for this to really work we need to make sure our numbers are right!
So let’s get to it! It is time for you to jump into your internet banking, pull out those accounts in the bottom draw and start retrieving those payslips from your deleted items in your inbox. With all that to hand, start working your way through. Don’t worry if you are missing information, an estimate will do for now and we can fill in any blanks later. I like to start with income (it tends to be easier!) and then to those dreaded piles of expenses. Using one of the planners above as a guide, take your time and make sure you are factoring in those pesky expenses that like to hit us from left field each year- the annual car registration for example!
If you have children or other adults living with you take some time to run through the expenses that might relate to them too- school banking, tuckshop, and pocket money come to mind! Each might only be small but add them all together and multiply them by 52 and eek!
The more detailed and accurate your budget (even if it looks a little grim at the moment) the better off you will be as you move into this next stage of your life. The sooner you can work out where any challenges are in your budget, the sooner you can get a plan to get back up on your financial feet.
It might seem trite that I am suggesting you get to budgeting when everything seems so hard but a little bit of order in what might otherwise seem chaos will help you to take the first steps to your new you. Your divorce will be ok if you just let it. If you can slow down, look after yourself and take your time to make important decisions about your future, your divorce will pass and you will come out the other side a ‘new’ and different person who you might really like! Don’t bury your head in the sand. Instead, take control of your life, get the information you need and make the best decisions you can and as my good friend Maria likes to say, however hard it might seem right now, don’t be afraid to make a few changes and ‘draft your new dream’ along the way.
Clarissa Rayward,based in QLD, is a dear friend to the Family Focus Legal team, mentor for FFL Principal Solicitor Rebekah Gates,, often referred to as 'the happy lawyer', a trail blazer for women in law as well as for the Collaboratuve Law process. We thank Clarissa for enabling us to share her article.