People often experience numerous challenges when adjusting to life after divorce. Trying to manage a household without a second person’s help can be difficult. Instead of sharing responsibility for dinner and dishes, one person will typically now have to do everything themselves.
Additionally, the financial circumstances of each spouse will shift dramatically as well. People who have acclimated to a dual-income lifestyle will need to adjust to lower household income levels and possibly additional personal responsibilities. How can someone preparing for divorce transition smoothly from a two-income household to a single-income home?
Handle debt in the divorce
Just as spouses have to share their resources when they divorce, so too do they typically need to negotiate arrangements for sharing responsibility for household financial obligations. Even when only one spouse has their name on an account, both may be responsible to help pay the balance back if they accrued the debt during the marriage.
Using marital property, including home equity, to address marital debt may diminish the assets in hand that someone has after the divorce, but it will also protect them from issues like their spouse failing to pay the debts or filing for bankruptcy. Either of those scenarios might open up someone trying to rebuild after divorce to aggressive collection activity despite the court order indicating that the other spouse was responsible for those specific accounts.
Consider health insurance and other benefits
It is common for health insurance to come from one of the spouse’s employment arrangements. People planning for divorce often need to consider what it will cost to purchase comparable health insurance and other key benefits provided through a spouse’s employment. Securing new coverage can be costly, but foregoing coverage can be even more risky.
Rework the budget as soon as possible
One spouse creating a thorough budget exploring how they currently spend marital resources is often a good starting point for a post-divorce budget. People may be able to identify wasteful spending habits quickly as they look at their current budget, which will make it easier to adjust that budget for future needs.
The bigger the likely upcoming shift in someone’s household income, the more important it will be to have a written budget that explores all of their obligations and establishes a minimum household income to meet those responsibilities. Especially if there are young children in the family, people adjusting to a single-income budget after divorce may need to communicate regularly with the other parent to help ensure that they can continue meeting their children’s needs.
Planning ahead can make the transition from a married household with two incomes to a single-wage budget less stressful.