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Writer's pictureJosephti Cruz

Budgeting During and After Divorce

Budgeting doesn’t always need to have a negative connotation—after all, it is the cornerstone of financial success. Creating and sticking to a budget is no easy feat despite its importance. Once divorce is thrown into the equation, the challenge becomes even greater. This week, Jade and I sit down to help listeners transition to a single-income household, giving practical tips to reach your financial goals. 



With many couples citing financial issues as a leading cause of divorce, it is essential to leave your bad spending habits in the past. Creating a healthier financial future begins with determining your income and expenses. While it may seem old-school, I share how filling out a budgeting worksheet can help you visualize your money. Since your budget begins with the amount that ultimately hits your bank account, it is up to you to determine which expenses are truly necessary. 


Jade and I give listeners a crash course on essential and discretionary expenses to help them decide what purchases are needed. According to their basic definitions, essential expenses are anything required for daily life. Rent, food, and transportation often fall into this category. Discretionary expenses are the “fun” activities that we indulge in. Anything from a daily coffee run to upgraded streaming packages, these purchases may make us smile, but our lives do not depend on them. 


There is a large gray area among these expenses. While your phone may be essential, do you really need the latest model? Do you really need the fanciest car, or can you trade down? Even within the realm of essentials, there is room to scale back. By analyzing your expenses, you can craft a budget that works for you, allowing you to adjust your budget to fit your lifestyle. 


two people holding hands and shopping bags

When scaling back discretionary expenses, the instinct is to eliminate them entirely. Jade suggests that listeners reassess these habits and consider the long-term benefits of more cost-effective alternatives. Everyone loves a cup of coffee in the morning—but what’s the harm in making it at home rather than purchasing it at a store? Getting creative with your expenses can still provide satisfaction without the hefty price tag. 


Adjusting to a budget requires discipline and flexibility. It's an ongoing process that can involve temporary sacrifices for long-term gain. Divorce involves heavy emotions and complicated situations, so don’t let your money be another thing to worry about. Living within your means allows you the freedom to begin carving out a greater financial future. 


To wrap up, we share our favorite budgeting tools and apps, highlighting the YNAB platform. Don't forget: aligning your expenses with your values is not merely about cutting costs but rather about creating a life that reflects your future aspirations.


 

Key Takeaways: 


  • Reframe Budgeting as Empowerment: Budgeting isn't just about restriction; it's a pathway to financial success. Embrace it as a tool to shape your future positively.


  • Navigate Divorce with Financial Clarity: Divorce can complicate budgeting, but it's crucial to leave old spending habits behind. Take control by understanding your income and expenses and distinguishing between essentials and discretionary spending.


  • Find Balance in Spending: Striking a balance between essentials and discretionary expenses is key. Evaluate needs versus wants, allowing room for adjustments that align with your lifestyle and long-term goals.


  • Embrace Creative Cost-Cutting: Reducing discretionary spending doesn't have to mean total elimination. Explore cost-effective alternatives while maintaining satisfaction and promoting financial stability amidst life changes like divorce.



 



Connect With Us! 

Jade Eagles on LinkedIn

Josephti Cruz on LinkedIn 


Divorce might be the end of one chapter, but it’s also a brand-new journey filled with hope and growth. Join us for practical tips for financial empowerment and insights to make this time a little less daunting.



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