The Breadwinner - Income Concerns After Divorce
Everyone who goes through a divorce knows that money is an inevitable part of the process. Considerations include income streams, distribution of assets, and legal fees. As the divorce gets settled, spousal or child support payments may also become contentious.
If you are the breadwinner for your family, you might be concerned about how you’re going to continue to make ends meet after the divorce. It can be tough to know what is reasonable and equitable to request when making financial decisions during the divorce process.
You shouldn’t have to live in a constant state of financial stress after divorce. In fact, the divorce was probably intended to alleviate a lot of stress in your life. Before you resign yourself to a life of scrimping and saving, make sure you explore the options available to you.
Map out your expenses
It’s hard to know how much money you need moving forward if you aren’t clear on what you spend. You’re not alone if your budget fell by the wayside post-marriage or after kids. It takes time and energy to keep up with spending habits. Household chores, kids, and work often take priority.
Understanding your expenses can help inform career decisions, asset distribution, child and spousal support, and a host of other issues during divorce. Once you know your monthly expenses, you can determine how much money you need to make - or what you may need to stop purchasing for the time being.
Staring your wallet squarely in the face can be uncomfortable, but dealing with real numbers provides eventual relief. Luckily, budgeting sheets and applications such as Quicken or Mint are a dime a dozen online. Haas Mediation provides one to our clients as well. With an accurate picture of your spending in relation to your income, you can move into steps two and three with greater confidence.
2. Think creatively about money
If you’re still in the midst of the divorce process, it may be in your best interest to ask for some sort of income contribution from your spouse. This is not unreasonable, especially if you share children. Take note, however, that the likelihood of compromise is higher in a mediated divorce process than with a lawyer-led, litigious approach.
Whether or not your request is honored, you also should consider ways to maximize your own income. Depending on your profession, there may be opportunities for a pay raise if you take on more responsibilities at work. You could also consider working overtime, at least temporarily, to help offset some of your new expenses.
Alternative options include taking on a second job or changing jobs altogether. In today’s market, longevity with one company does not always guarantee higher pay. It is worthwhile to explore the going rate for jobs like yours and make sure you are getting a fair wage at your current position.
Finally, another way to cut down on expenses is making changes to your lifestyle. You might have to choose between increased work hours or giving up something you’re accustomed to, such as a timeshare or cleaning service. Ask yourself which expenses are expendable.
3. Don’t forget to value your time
It’s easy to become focused on the dollar amount you will need to earn each month after a divorce. Don’t lose sight of another finite resource: time.
While time is not something you can increase in the same way as money, it is an important factor in both your earning capabilities and your quality of life. As you decide what to ask for when it comes to spousal or child support, budget your time just like you would budget your money.
If you will have shared custody of your children, that is going to affect your work availability. If you don’t have children, you may have more flexibility. However, don’t forget the unpaid labor your spouse did to maintain your household that will now fall exclusively on you. Tasks like cooking, shopping, cleaning, and laundry take up large amounts of time. These can be outsourced, but it’s helpful to weigh the monetary expense against the cost of your time.
4. Get some outside help
Many people going through a divorce feel uninformed and alone. So much is changing about your life, and you’re not sure what to ask for or who to turn to for help. Many couples participate in lawyer-led divorces, which means each party will likely ask for something that doesn’t align with the other’s wishes and costs each party upwards of $60,000.
An alternative path forward is divorce mediation. In mediation, a divorcing couple works with a professional facilitator to make their own decisions about how assets will be distributed and income expectations will be met. If children are involved, the co-parenting agreement can be highly detailed and account for both time and money expectations.
Mediators also have a wealth of resources to offer to their clients. Here at Haas Mediation, we provide a budgeting worksheet to couples to help them create an accurate financial picture of current income and expenses. We also refer clients to accountants or financial planners if the couple needs more guidance than we are equipped to give.
If you have concerns about making ends meet after your divorce, we are here to help. Schedule a free fifteen-minute consult today to explore the ways mediation can help alleviate your financial stress.
Interested in learning more?
- Andrew Haas, Founder & Principal Mediator
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