I have child support and alimony budget. I need help planning my new budget having not run the family finances. Where can I find help?
Divorce is one of those things we’re really never prepared for, either emotionally or financially, but we put one foot in front of the other and move forward. I’m glad you are receiving child support and alimony so you can begin your new life on solid financial footing.
Transitioning from being a married person and either sharing money duties or having someone else do them, to being completely on your own can be a little overwhelming. As someone who has been there, I can tell you firsthand you’ll quickly adapt and become very comfortable managing your own finances.
One of the biggest adjustments you’ll likely encounter will be making decisions on your own. It’s a big change from married money and it’ll probably take some time to trust your own decision-making skills. Everyday decisions like how much to save, how much to spend, and how to tackle debt might be uncomfortable at first, but not for long. If you set financial goals, build your budget to support those goals, and stick to your budget, your money will take care of itself.
Before we talk about goals and budgets, I want to talk about savings, specifically emergency savings. As a single person, you are now on your own financially so you’ll want to be prepared for any unexpected expenses that could derail your finances. This is where emergency savings comes in. It’s a savings bucket of a minimum of 3 months of your living expenses in a safe location like an interest-bearing checking account separate from your normal checking account. Many people use a traditional savings account for this purpose, too. Having emergency savings will help get you through any kind of unexpected expense (home repair, emergency medical procedures, car repairs) that could easily cause you to incur debt or throw your budget out of whack.
Establishing financial goals will give you direction for your money and can include things like emergency savings, paying off debt, savings for your kids’ education, retirement, and anything else you might want to consider. Your goals should be very specific, measurable, and achievable. You may not be able to include everything right now as your life transitions, but you can certainly plan for them and adjust your budget to support more goals as your financial situation allows.
Now, on to budgeting! To set up your budget, use the Ideal Budget, which is a great way to help you frame your spending. You’ll see budget categories and recommended percentages for each one. For income, include your income, alimony, and child support. You may find you need some additional categories or maybe you don’t need all the ones in the Ideal Budget, but that’s ok because it’s yours to make it your own. If you stayed in the house you lived in while married, you could see your housing expenses greater than 25% of your budget. You’ll need to adjust other categories to stay within 100%.
That’s about all you need to know to get started on your first budget Nikki. The magic comes when you track spending and stick to your budget.