Not only is a divorce emotionally draining, it also creates a huge strain on your finances. After all of the legal expenses, moving expenses and a host of other divorce related expenses, you are going to be out of pocket. After enjoying the luxury of two incomes, you will need to cut your costs and make some major adjustments to your spending habits. Here are some tips on how to budget after a divorce in Australia.
After enjoying the luxury of two incomes, you will need to cut your costs and make some major adjustments to your spending habits.
List all current income sources
You may have one main job but receive money for consulting work that you do on the side or child support. List all your sources of income and an estimate of the amount of money that you know you have coming in every month.
Make a list of your monthly expenses
Record your monthly expenses via a household budget calculator, you will find that there are things that you can eliminate. If you own a car, but it is cheaper to take public transport to work, do so. If you eat out for lunch every day, start taking packed lunch. If you go out with friends twice a month, reduce it to once a month. Whatever is non essential on your list of expenses, get rid of it.
Start looking for ways to make more money
You may have some talents that you haven’t used in a while. Well this is the time to get creative, if there are things that you know you can do to make extra money go ahead and do it. If you can write, start freelance writing, if you can sew, start making clothes, if you are a good handy man, start getting paid to fix things. Whatever talent that you have, allow it to bring you a second income. You can also get a second job in the evening for a while.
Don’t get into any more debt
It may be tempting to get a new credit card in Australia, or increase your overdraft instead of adjusting your budget. This is not a good idea and will lead to a vicious cycle of debt that will be difficult to get out of.
Changes don’t have to be permanent
Don’t get too emotional about cutting out so many of the things that you enjoy, the changes to your budget don’t have to be permanent. Once you have found a way to increase your income, you can slowly start to reintroduce the things that you had eliminated.
Have you recently gone through a divorce and had to adjust your budget? Comment below.