Budgeting is a critical part of managing finances for many California residents and others around the country. However, it becomes even more paramount for individuals going through a divorce. Financial experts recommend focusing on several specific areas as a couple moves from living with two incomes to existing with one.
The largest expense in most households is a mortgage payment. When a home loan was obtained, the payment was covered by two incomes. Now that one of those will be out of the equation, it may become difficult to continue making the payments. Property taxes and homeowners’ insurance must also be taken into consideration when determining if keeping the family home is the best financial decision.
Another expense for many couples is a car payment. A similar analysis should be done for a car and its associated expenses as is suggested for a mortgage. Health insurance can also be a large expenditure in a budget. If a person was on a spouse’s health care plan, he or she would now be responsible for finding new coverage. As this will likely be more expensive than when on a spouse’s plan, it would be wise to consider deductibles, copayments and possible flexible spending account options.
General expenses, such as cable bills, should be addressed to determine if they should be continued with one income. Finally, there may be natural inclination to take a break from putting money into savings or retirement funds. However, focusing on long-term goals is critical during this time.
Dealing with financial issues can be a stressful process, particularly when someone is going through a divorce. To alleviate this stress, it would be beneficial to contact a California divorce attorney. An experienced lawyer can assist clients with all aspects of the divorce process, including financial considerations.
Source: fool.com, “Getting Divorced? Time to Rethink Your Budget“, Maurie Backman, Nov. 12, 2017