Divorce Finances Spreadsheet

Divorce Finance Basics

When a couple splits up, the woman's disposable income may be greatly reduced if her husband was the main breadwinner for the family. If the man moves out of the family home, then he becomes asset poor. The man's disposable income does take a hit as well, but in many cases, the impact on the woman's financial situation is greater.

The results of a study conducted in Australia in 2002 revealed that after divorce, an average man's disposable income fell by nine percent. In comparison, the average divorced woman's disposable income fell by 42 percent!

Preparing Your Divorce Finances Spreadsheet

Once the divorce settlement has been worked out, you'll know exactly what assets you have. Input all this information into a divorce finances spreadsheet.

Make a Budget

A budget is a plan for managing your money. You need to start by inputting your income from all sources into your divorce finances spreadsheet. If you regularly work overtime, list this as well. If that money is not something you can rely on each month, however, you should leave it off the list.

The next step is to list all of your expenses. Divide these into fixed expenses (such as mortgage or rent, utilities, property taxes, loan payments, or food) and variable expenses (such as entertainment, dining out, gym membership, or clothing).

The fixed expenses are things that are set amounts to be paid each month. If you need to make adjustments to your budget to fit your new financial circumstances, it makes sense to make changes to your variable expenses first. You may need to buy your clothing at a department store instead of a specialty shop. Taking your lunch with you to work may have to replace buying a meal every day. Start renting movies you can watch in your home instead of going to the movie theater as often.

Consider Your Values

The way we spend money generally reflects our values, and you will need to decide what things are most important to you when you decide how to spend the funds you have available to you. If hanging on the family home is a priority, you may have to make cuts in other areas.

Another option is to explore options for bringing in extra income. You may want to let your employer know that you are available for extra assignments or take on a second job to bring in some more cash.

Include a Savings Plan in Your Budget

All budgets should include some funds set aside for savings. Even if your budget is a well-planned one, an unexpected bill or emergency can have a significant effect on your finances.

A great strategy for saving money is to pay yourself first. If you wait until after all the bills are paid before you put any funds into your saving account, then it will be much more difficult to save money. Instead, decide on a figure that you are going to put away and treat it like a bill to be paid. Set up a separate savings account and have the funds deposited in there automatically each month.

Establish Credit in Your Own Name

If you have never had credit in your own name, then you need to establish your own credit rating. Apply for a credit card through your bank or a department store.

If you are not successful in getting credit through either one of these methods, consider applying for a secure credit card. With this type of card, you will be required to provide a security deposit to the credit card company that is held in an account to be used if you fail to make your payments. Be sure you ask whether these funds will be held in an interest-bearing account and under what circumstances the funds will be used. Will they be accessed if you fail to make one payment or if you are several months behind? Will your credit limit be equal to the amount of your deposit?

Moving Forward

Getting your financial house in order following a divorce is a necessary step in moving forward with your life. Start by gathering information and putting it on a divorce finances spreadsheet. That way, you have a clear picture of your finances and can make a plan for using these resources effectively.

Additional LoveToKnow Resources

For more tips on making a household budget and living a frugal lifestyle, visit LoveToKnow Save.